Entering text into the input field will update the search result below

Exxon Mobil Corporation, Currently Undervalued And A Strong Buy

Dividends4Life profile picture


  • Exxon Mobil Corp., formed through the merger of Exxon and Mobil in late 1999, is the world's largest publicly owned integrated oil company.
  • With a relentless pursuit of efficiency via technology and operational improvement, Exxon sets itself apart from other supermajors and has delivered higher returns on capital.
  • On October 31, 2014, the company announced third-quarter 2014 earnings of $1.89 per share, up from $1.79 in the prior year's third quarter.

Linked here is a detailed quantitative analysis of Exxon Mobil Corporation (NYSE:XOM). Below are some highlights from the above linked analysis:

Company Description: Exxon Mobil Corp., formed through the merger of Exxon and Mobil in late 1999, is the world's largest publicly owned integrated oil company.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value, along with these four calculations of fair value; see page 2 of the linked PDF for a detailed description:

1. Avg. High-Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

XOM is trading at a premium to all four valuations above. The stock is trading at a 26.8% discount to its calculated fair value of $132.17. XOM earned a Star in this section, since it is trading at a fair value.

Dividend Analytical Data: In this section, there are three possible Stars and three key metrics; see page 2 of the linked PDF for a detailed description:

1. Free Cash Flow Payout
2. Debt-to-Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%

XOM earned two Stars in this section for 2.) and 3.) above. The stock earned a Star as a result of its most recent Debt-to-Total Capital being less than 45%. XOM earned a Star for having an acceptable score in at least two of the four Key Metrics measured. The company has paid a cash dividend to shareholders every year since 1882, and has increased its dividend payments for 32 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this

This article was written by

Dividends4Life profile picture
My entire career has been spent in industry within the finance and accounting realm. My career started in 1985 and has included exposure to implementing SFASs

Analyst’s Disclosure: The author is long XOM, COP, CVX. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (17)

Agree 100% with your article, excellent job.
1973 here.
Excellent article. Twenty or so years ago I recall reading an annual report from Exxon. At that time, as now, there was some concern about emerging energy sources such as electric, solar, hydrogen, etc. More recently there has been some discussion of the feasibility of cold fusion as a limitless energy source.
In the annual report I recall a sentence that read something similar to...."If new energy sources become available no other company in the world will be better able to make them available"...something like that.
Change is the rule of life, and doubtless someday there will be viable new sources of energy. Certainly, XOM has adapted superbly to energy needs for more than a century. Just asking the author if you have any additional thoughts on XOM's ability to adapt to future technological changes, though I think I may have answered my own question. Any thoughts appreciated. Thanks.
Dividends4Life profile picture
Horse Sense: I am very bullish on XOM. They have the size and resources to adapt to change and, I believe, the culture to do so.

Best Wishes,
XOM is the biggest and strongest of the publicly owned oil companies but if one is willing to accept a little more risk better opportunities lie elsewhere.
That is always the case regardless of the stock being discussed. I have owned XOM since 1958, done pretty well and sleep well.
When there is trouble on the horizon, you want to be behind the largest and strongest!
What? Only 9 articles on XOM in the past 10 days?
Does only 9 nine articles or less in 10 days qualifies this stock as a "Buy" signal ?
11 Nov. 2014
One of few companies who could pay off their debt in less than a year's net income. XOM is strong and prepared for adversity. Strangely I have not heard anyone anywhere discuss what would happen to BP if it suffered another big disaster.
I just keep adding whenever opportunities present themselves, the most recent opportunity being at $88. The biggest, the best managed, and the most profitable.
What is "best managed" based on? I have known a number of people who have worked at either Exxon or XTO who would disagree with this
tunaman4u2 profile picture
With oil at $77... if the market turns down here & will bring XOM down hard with it for a better entry point. I'm selling mine soon
I sold out of my long XOM shares yesterday. I owned less than 2% of my portfolio in this stock and have done decently well on it. Why did I sell? I already own 3 other oil companies (COP, CVX, PSX), which I feel are diversified enough and offer better long-term potential than XOM (not that XOM doesn't also offer long-term potential).
Old Professor profile picture
Good luck on this, but glad you're not my financial advisor.
hard for me to imagine a scenario in which i would sell XOM. good luck.
CompoundingDollaz profile picture
Here's a scenario in which one can draw a conclusion that COP and PSX are kicking the crap out of the performance of XOM. I'd agree with cheesepep

Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About XOM

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on XOM

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.