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What Primarily Makes ExxonMobil Resilient in Uncertain Times
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Key Takeaways
ExxonMobil relies on a strong balance sheet to navigate oil and gas price volatility.
XOM's 14.04% debt-to-capitalization is far below the industry average of 29.2%.
Financial strength enables ExxonMobil to fund projects, pay out dividends and pursue acquisitions.
Exxon Mobil Corporation (XOM - Free Report) generates the majority of its earnings from upstream operations, and, therefore, is highly vulnerable to volatility in oil and natural gas prices. However, unlike many energy companies, XOM can rely on its strong balance sheet to sail through the period of business uncertainty.
XOM has a debt-to-capitalization of 14.04%, significantly lower than 29.2% for the composite stocks belonging to the industry. Thus, the integrated energy giant has significantly lower exposure to debt capital than many of its peers. The strong balance sheet helps ExxonMobil to maintain operations, fund capital projects and pay out dividends even when the pricing environment of commodities turns unfavorable.
On top of that, XOM’s borrowing costs will likely be low, owing to its strong creditworthiness. Also, during business uncertainty, when many firms will be forced to divest their operations, XOM will be able to pursue acquisitions on favorable terms, owing to its financial strength.
CVX & COP Also Have Strong Balance Sheets
Like XOM, Chevron Corporation (CVX - Free Report) and ConocoPhillips (COP - Free Report) have considerably lower debt exposure. Thus, both CVX and COP, despite having huge vulnerability to oil and gas price volatility, can support their operations during uncertain times.
While CVX has a debt-to-capitalization of 17.5%, COP has 26.7% of debt to capitalization.
XOM’s Price Performance, Valuation & Estimates
ExxonMobil’s shares have gained 36.2% over the past year compared with the 32.6% improvement of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 10.15X. This is above the broader industry average of 6.45X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for XOM’s 2026 earnings has seen upward revisions over the past seven days.
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Image: Bigstock
What Primarily Makes ExxonMobil Resilient in Uncertain Times
Key Takeaways
Exxon Mobil Corporation (XOM - Free Report) generates the majority of its earnings from upstream operations, and, therefore, is highly vulnerable to volatility in oil and natural gas prices. However, unlike many energy companies, XOM can rely on its strong balance sheet to sail through the period of business uncertainty.
XOM has a debt-to-capitalization of 14.04%, significantly lower than 29.2% for the composite stocks belonging to the industry. Thus, the integrated energy giant has significantly lower exposure to debt capital than many of its peers. The strong balance sheet helps ExxonMobil to maintain operations, fund capital projects and pay out dividends even when the pricing environment of commodities turns unfavorable.
On top of that, XOM’s borrowing costs will likely be low, owing to its strong creditworthiness. Also, during business uncertainty, when many firms will be forced to divest their operations, XOM will be able to pursue acquisitions on favorable terms, owing to its financial strength.
CVX & COP Also Have Strong Balance Sheets
Like XOM, Chevron Corporation (CVX - Free Report) and ConocoPhillips (COP - Free Report) have considerably lower debt exposure. Thus, both CVX and COP, despite having huge vulnerability to oil and gas price volatility, can support their operations during uncertain times.
While CVX has a debt-to-capitalization of 17.5%, COP has 26.7% of debt to capitalization.
XOM’s Price Performance, Valuation & Estimates
ExxonMobil’s shares have gained 36.2% over the past year compared with the 32.6% improvement of the composite stocks belonging to the industry.
From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 10.15X. This is above the broader industry average of 6.45X.
The Zacks Consensus Estimate for XOM’s 2026 earnings has seen upward revisions over the past seven days.
ExxonMobil currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.