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Reasons to Retain ExxonMobil (XOM) in Your Portfolio Now
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Exxon Mobil Corporation (XOM - Free Report) is a leading integrated energy player. Over the past seven days, the firm, carrying a Zacks Rank #3 (Hold), has witnessed upward earnings estimate revisions for 2024 and 2025.
What's Favoring the Stock?
The price of West Texas Intermediate crude is currently trading at more than the $85-per-barrel mark. The favorable trajectory in oil prices is a boon for ExxonMobil’s upstream operations. In the Permian Basin – the most prolific oil and gas resource in the United States – and offshore Guyana, ExxonMobil has a solid pipeline of profitable projects.
In order to have a dominant presence in the Permian, ExxonMobil has entered into a staggering $59.5 billion all-stock deal to buy Pioneer Natural Resources. Pioneer Natural is one of the foremost oil producers operating in the Permian Basin. With the deal closure, Permian production of the integrated energy major will more than double to 1.3 million barrels of oil equivalent per day (MMBoE/D). Furthermore, ExxonMobil projected that this production figure will rise to an impressive 2 MMBoE/D by 2027.
In Stabroek Block, located off the coast of Guyana, ExxonMobil has made many major discoveries that significantly improve its production outlook. The advantaged growth projects of Guyana have lower greenhouse gas intensity than most of the oil and gas-producing resources across the globe. Thus, in the upstream business front, it could be said that ExxonMobil’s prospects are solid.
XOM has a strong balance sheet, hence it can withstand adverse business environments. XOM has a total debt-to-capitalization of 16.4%. Compared to the 24.2% debt-to-capitalization of composite stocks belonging to the industry, ExxonMobil is better off.
Risks
However, in terms of dividend yield, XOM has consistently lagged composite stocks belonging to the industry over the past year. Also, the energy giant’s financial position was undermined by extensive investments in low-yield projects over several years and the impact of the coronavirus pandemic.
Sunoco, a leading independent fuel distributor in the United States, has a stable business model and relatively lower exposure to commodity price volatility. This is because the partnership distributes fuel to branded distributors under long-term contracts.
PBF Energy is also on a solid footing to gain from rising gasoline demand since it is a leading North American independent refiner. Apart from having a conservative balance sheet and strong liquidity, PBF Energy is investing in lucrative projects that may aid the company in generating significant returns for shareholders.
Murphy USA is a renowned retailer of gasoline and convenience goods, distinguished by its adaptable business model that effectively enhances profitability during periods of economic expansion and recession.
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Reasons to Retain ExxonMobil (XOM) in Your Portfolio Now
Exxon Mobil Corporation (XOM - Free Report) is a leading integrated energy player. Over the past seven days, the firm, carrying a Zacks Rank #3 (Hold), has witnessed upward earnings estimate revisions for 2024 and 2025.
What's Favoring the Stock?
The price of West Texas Intermediate crude is currently trading at more than the $85-per-barrel mark. The favorable trajectory in oil prices is a boon for ExxonMobil’s upstream operations. In the Permian Basin – the most prolific oil and gas resource in the United States – and offshore Guyana, ExxonMobil has a solid pipeline of profitable projects.
In order to have a dominant presence in the Permian, ExxonMobil has entered into a staggering $59.5 billion all-stock deal to buy Pioneer Natural Resources. Pioneer Natural is one of the foremost oil producers operating in the Permian Basin. With the deal closure, Permian production of the integrated energy major will more than double to 1.3 million barrels of oil equivalent per day (MMBoE/D). Furthermore, ExxonMobil projected that this production figure will rise to an impressive 2 MMBoE/D by 2027.
In Stabroek Block, located off the coast of Guyana, ExxonMobil has made many major discoveries that significantly improve its production outlook. The advantaged growth projects of Guyana have lower greenhouse gas intensity than most of the oil and gas-producing resources across the globe. Thus, in the upstream business front, it could be said that ExxonMobil’s prospects are solid.
XOM has a strong balance sheet, hence it can withstand adverse business environments. XOM has a total debt-to-capitalization of 16.4%. Compared to the 24.2% debt-to-capitalization of composite stocks belonging to the industry, ExxonMobil is better off.
Risks
However, in terms of dividend yield, XOM has consistently lagged composite stocks belonging to the industry over the past year. Also, the energy giant’s financial position was undermined by extensive investments in low-yield projects over several years and the impact of the coronavirus pandemic.
Stocks to Consider
Better-ranked players in the energy space include Sunoco LP (SUN - Free Report) , PBF Energy Inc. (PBF - Free Report) and Murphy USA Inc. (MUSA - Free Report) . While Sunoco and Murphy sport a Zacks Rank #1 (Strong Buy), PBF Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco, a leading independent fuel distributor in the United States, has a stable business model and relatively lower exposure to commodity price volatility. This is because the partnership distributes fuel to branded distributors under long-term contracts.
PBF Energy is also on a solid footing to gain from rising gasoline demand since it is a leading North American independent refiner. Apart from having a conservative balance sheet and strong liquidity, PBF Energy is investing in lucrative projects that may aid the company in generating significant returns for shareholders.
Murphy USA is a renowned retailer of gasoline and convenience goods, distinguished by its adaptable business model that effectively enhances profitability during periods of economic expansion and recession.