Exxon Mobil: The Q2 Trough, Buy At Maximum Pessimism

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About: Exxon Mobil Corporation (XOM)
by: Equanimity Investing
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Equanimity Investing
Value, Long/Short Equity, medium-term horizon, Contrarian
Summary

Investors are focused on a potential dividend cut, but that's fixable.

Macro conditions, analysts' outlooks, and Exxon's valuation have reached maximum pessimism, which may set the stock up for good long-term returns.

The company produces higher returns on invested capital relative to integrated majors; it also carries "AA" credit ratings.

Management has heavily invested and not sold assets during this downcycle, which may make the stock a winner during an upcycle.

Buy Exxon.

The oil & gas industry has been absolutely pummeled for about seven consecutive years now. Oil prices collapsed from over $100/bbl for both WTI and Brent in 2014 to under $20/bbl in 2020 due a