Back to top

Image: Bigstock

How ExxonMobil Keeps Rewarding Shareholders Across Various Oil Cycles

Read MoreHide Full Article

Key Takeaways

  • XOM has raised dividends for 43 years and remains a top S&P 500 dividend payer with major share buybacks.
  • ExxonMobil benefits from low-cost oil and gas resources and a debt-to-capitalization ratio of 13.6%.
  • XOM stock rose 19.9% in a year and trades at 8.40X EV/EBITDA, above the industry average of 5.31X.

Exxon Mobil Corporation (XOM - Free Report) , an integrated energy giant, generates the majority of its earnings from upstream business, which makes its business model extremely vulnerable to the volatility in commodity prices. Despite the vulnerability, XOM has been able to return capital to its shareholders consistently.

For 43 consecutive years, ExxonMobil has been increasing dividend payments. In fact, among the S&P 500 companies, XOM is the second-largest payer of dividends. The integrated major also repurchases shares aggressively.  The company is likely to have bought back $20 billion of its shares in 2025, and it expects to maintain the pace this year as well. 

Thus, it seems that despite the vulnerability, the company has survived all business cycles. This resilience largely stems from ExxonMobil’s access to low-cost, prolific oil and natural gas resources, along with its strong balance sheet. Notably, XOM has a debt-to-capitalization of 13.6%, considerably lower than 29.2% of the composite stocks belonging to the industry.

FANG & COP are Also Resilient Like XOM

Diamondback Energy Inc. (FANG - Free Report) and ConocoPhillips (COP - Free Report) are also likely to survive business uncertainty, despite their strong upstream presence. This is primarily due to their lower exposure to debt capital. While FANG’s debt to capitalization stands at 26.3%, COP’s debt to capitalization is 26.6%. Both FANG and COP have a presence in Permian, the most prolific basin in the United States, and are thus able to sail through low oil prices.

XOM’s Price Performance, Valuation & Estimates

Shares of XOM have gained 19.9% over the past year compared with the 15.3% improvement of the composite stocks belonging to the industry.

Zacks Investment Research Image Source: Zacks Investment Research

From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 8.40X. This is above the broader industry average of 5.31X.

Zacks Investment Research Image Source: Zacks Investment Research

The Zacks Consensus Estimate for XOM’s 2026 earnings has seen upward revisions over the past seven days.

Zacks Investment Research Image Source: Zacks Investment Research

ExxonMobil currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Exxon Mobil Corporation (XOM) - free report >>

ConocoPhillips (COP) - free report >>

Diamondback Energy, Inc. (FANG) - free report >>

Published in