Exxon vs. the S&P 500

With oil up 35% year to date, one would think that the biggest energy company in the world, XOM, would be up on the year as well.  As shown below, however, Exxon is now even underperforming the S&P 500 in 2008, down 15.32%.

click to enlarge

Comments

[Mullyden]

And your point is.......................

[Edward,LordClarendon]

Ahhh. Duh. Do you get paid to post this bit of insight?

[Ben S.]

The reason is because XOM is such a huge integrated oil company, they are on both sides of this from drilling to refining, which means if prices go up their margins get squeezed on one end. Still, I agree that at these levels, XOM is a bargain and they will blow out earnings at the end of the month.

[Scoups2000]

Bespoke = Ignore.

[DaveW]

This is exactly why DIG/DUG are the least desireable ways to long/short Oil and Gas. So glad to see DXO/DTO and UOY/DOY come along.

[DaveinHackensack]

This hardly qualifies as an article; it's an observation without any attempt at insight.

XOM is, of course, an integrated major, but people sometimes overstate the impact of its refining business. Last year, 23.6% of XOM's earnings came from downstream operations -- a significant percentage, to be sure, but not enough to keep XOM's upstream business from driving profits to record highs.

Ben S. is right: XOM will probably report blowout earnings. This will start the process of upward earnings estimate revisions, but even based on the current '09 estimates XOM looks cheap: it's trading at less than 8x those earnings.

And, of course, XOM has $31 billion in net cash and a higher credit rating (triple-A) than most governments.

[Cat~eyes]

I'm gonna have to agree with you, DaveinHackensack... There was no point to this. We don't track the health of XOM based on the S&P. As a previous user noted, XOM has services in both the refining and drilling aspects of the business. That's why sometimes the stock price doesn't make sense to those not doing their homework. (most think that if oil prices go up, then naturally XOM must go up, or vice-versa, and that's not always the case). There are too many factors affecting XOM's price and it's a shame we didn't get to learn a bit more about what they currently are from this article.

Having said that.. as someone who has held onto every single share of XOM for the last 4 years... I'm not getting out anytime soon! :)

[Michael*WD]

Over the past 22years Exxon has doubled the market value per share every 6+/- years plus paying a dividend that has been incresed almost annually. That takes into consideration the recent 14% drop in market value.

[KevinInTX]

My mother in law started out with 275 shares of Standard Oil in 1964. Through stock splits she now owns 8800 shares of Exxon Mobil and's it's worth over $700,000. Plus it has been paying good dividends all these years. According to one report I read, they have paid dividends for over 100 years and for the last 25 years they've increased the dividend every year. Not bad!