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Exxon Mobil: Buy This 6.1% Yielding Energy Champ Today

May 02, 2021 12:01 PM ETExxon Mobil Corporation (XOM) Stock220 Comments
The Asian Investor profile picture
The Asian Investor


  • The reopening of the US economy and recovering crude prices could fuel XOM's free cash flow.
  • Exxon Mobil Corporation just posted its first profit in more than a year.
  • Free cash flow recovery in FY 2021 signals potential for a dividend raise.

prairie morning winter
Photo by chinaface/E+ via Getty Images

With energy prices rebounding and the US economy set to reopen, Exxon Mobil Corporation (NYSE:XOM) is a buy. The firm just posted its first profit after more than a year and free cash

This article was written by

The Asian Investor profile picture
I look for high-risk, high-reward situations. Five largest portfolio holdings: Bitcoin, SoFi, Alibaba, PayPal, Western Alliance. Early buyer of cryptocurrencies. I live in Thailand :)

Analyst’s Disclosure: I am/we are long XOM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (220)

Ptstanford profile picture
We who are in favor of oil and gas energy are witnessing a kind of "karmac justice" regarding the Biden administration and their legions of green followers.

Not since Jimmy Carter have we seen gas lines, and though for different reasons, the ghosts of the 70's are revisiting us.

Suddenly, carbon based fuels so hated by the masses have obtained rock star status since miles and miles of cars are lining up so as to receive "communion".

I haven't seen anyone getting a windmill or solar panel installed on the roof of their SUV, or even talking about it... just desperate and slavish fossil fuel worship and willingness to pay any price at the gas pump.

Some one (can't remember who) from Sleepy Joe's administration came out and acknowledged that pipelines indeed are the most efficient and safest way to transport fossil fuels. Imagine that.

This somewhat begs the question -- why then cancel the Keystone Pipeline project which would have added yet another margin of safety and efficieny to transport?

Meanwhile, back at the ranch, Biden has acknowledged the border crisis with Mexico and is quietly finishing the construction on Trump's hated and maligned wall. Shhhhh... don't tell anyone!

Hmmmm..... could this mean the Keystone Pipeline with all its jobs and "safety" benefits could well be reinstated?
ALLDAY1 profile picture
I believe that you nailed it and well stated of course.It is unfortunate that Uncle Joe is so ingrained in his own anti-Trump methodology to eliminate all of the things good or bad that President Trump did during his 4 years that he is throwing the baby out with the bath water. I understand that they are going to maybe build more wall:
Biden considers building more wall

Biden is now walking back his proclamation statement that his administration will not build border walls.
He is reportedly considering a return to construction of the southern border wall in order to fill in gaps that undocumented aliens took advantage of when construction was halted.
Smugglers send groups of illegal crossers through the gaps to overwhelm the agents. When agents leave to intercept or apprehend one group, another one dashes across.
According to reports, DHS Secretary Alejandro Mayorkas explained that the president has ended funding based on Trump’s emergency declaration, but this leaves room for work on areas of the wall that need renovation and “particular projects that need to be finished.”


It also look like Colonial Pipeline paid the ransom to allow opening up the pipeline and that Biden said "no comment"
Will this be the incentive to restore the xl pipeline ? Well , my opinion is NO, unless we have other instances, but that is a hard decision for him to make ( unfortunately I don't think he makes any decisions ) . Anyway
Great Post.

Douglas Payne profile picture
@Ptstanford DON'TCHA KNOW?? Occasional Cortex and Talltib Rash.. have DECREID THAT SLEEPY JOE GOTTA WORSHIP AT THE ALTER OF WOKE SOCIALISM and together with GRETA THUNBERG.. AMERICA SHALL FOLLOW AL GORE AND JOHN KERRY DOWN THE PATH OF CARBON CASTRATION.. tough road.. but the socialists are leading the way~!!
Ptstanford profile picture
A few years ago I bought RDS.A (Shell oil) thinking it was the best positioned among the major oils.

WRONG! Shortly after everything went to hell and they cut the div, which made things worse.

A few days ago, I got to about even, dumped Shell and switched to XOM.

FINALLY it would seem we're coming out of the "hate oil woods" .
Douglas Payne profile picture
@Ptstanford .. Praise the Heavens.. I believe you have self interest and I believe you shall be richly rewarded.. I really got tired of being SOLD on Dividend Reinvestment Stocks.. and BEGAN TO READ BRAD THOMAS' DAILY iREIT Group recommendations.. and what he said about EXXON in February of 2020.. and what he was saying about SIMON PROPERTY GROUP and a few Sweet ones.. LIKE ARBOR REALTY all at the same time... WELL this all coincided with transferring of Individual Retirement Accounts to my chosen brocker Chas Schwab... I went all in on Brad Thomas cause I couldn't catch him in a fib.. it's been 13 months since first I've made my positions AND w/in a few days.. COVID PANDEMIC made things frighteningly scary... YET.. I MADE A COMMITTMENT TO BRAD.. and he didn't hide.. but BEGAN POUNDING THE TABLE.. .. AND I BACKED UP THE TRUCK... 13 months and a few days later... My investment account has topped 75% returns and delivering monthly and quarterly dividends of a very attractive nature... iReit is a Champ.. land it is RUN by HONEST PEOPLE WHO DON'T worry about doing anything but their work and USE COMMON SENSE... YUP.. I liked these guys before I invested a cent.. and now that I'm all-in.. I'm THRILLED with THE RESULTS~!! (KEEPING YOU POSTED.)
XOM busts over 62/share, MUCH earlier than some expected. Some guy said just 2 days ago that we'd have to wait until the end of 2022 to see 57-62 based on his charts. So glad I was blessed with common sense instead of charting "skills".
HATEFEEBAY profile picture
@Proud Patriot With a large ERX position, I cannot complain. I even bought 2 days ago at 3+% down and gained almost 5% in a day :-) This was after buying and banking 78% in 7 weeks earlier this year-TAX FREE in an old ROTH account. This market is completely hosed is our US currency long term, our currency being the #1 issue to deal with.
Douglas Payne profile picture
@cecilbatt11 To be clear my cost basis is below $50 so anything above $50 is gravy. Exxon is a hell of a company but they are in an industry that carries lots of embedded risk. Don't get greedy. This party only has a few years left ..... ride it for now but be ready to get out is my humble advice.
Good article. How about an article on CVX and Enbridge? Thanks.
ALLDAY1 profile picture
Ahhh yes , it appears that while some do not like the messages posted on this stock, I for one am quite satisfied. Of course there will be some of the Negative posters who for whatever reason missed the opportunity to invest when those opportunities existed and are now upset either with the comments that positive investors have posted or have signaled out particular hate messages displaying their ignorance or in some cases lack of investing objectives which is to be profitable. For those of us who have rode the path up there seems to be an air of a relaxed momentum that brought us this far, while keeping a watchful eye on any breakdowns which may cause a slide. The anticipation of the upcoming ex-day on 5/12 will most likely be filled with I told you so , or why the dividend is not increased further. Of course for the negative posters they will post messages complaining about their messages being deleted and wondering why, some posted by the trolls or personal attacks and still wondering why when the reason is obvious.
For the many who caught the stock when it was cheap and are now enjoying the upswing, let us all hope it continues, but always be cautious and pay attention. For the negative posters....well they do provide a certain level of humor until their messages are deleted and than they have one more reason to complain. There is a measure that they look forward too and that is the message count, as it seems to be a benchmark for achievement or in some cases knowledge.

HATEFEEBAY profile picture
@ALLDAY1 I have to say seeing you post this "Ahhh yes , it appears that while some do not like the messages posted on this stock, I for one am quite satisfied. Of course there will be some of the Negative posters who for whatever reason missed the opportunity to invest when those opportunities existed and are now upset either with the comments that positive investors have posted or have signaled out particular hate messages displaying their ignorance or in some cases lack of investing objectives which is to be profitable" reminds me of, well, lol

Flex68 profile picture

You and @allday must be kin, lol.

Past performance may, indeed, not be a predictor of future performance...
XOM is down from highs around June 20, 2014 by about 40%;
KHC is down from highs around February 17, 2017 by about 55%.

Whilst the DJIA is up somewhere in the neighborhood of +95% since June 2014, and about +66% since February 2017.

ETF and/or index investments would have far exceeded singular investments in either stock!

While there have certainly been shorter-term opportunities in each for decent returns,

you all preach on!
HATEFEEBAY profile picture
@Flex68 I am up 100% in 2 years with my divs on KHC and on ERX (I do not own XOM), I made 76% on 7 weeks, rebought at a lower amount, made and banked, rebought, up and holding well into the black. The two have done terrific, so not complaining. I'm long KHC, but I admit I trimmed a little from KHC and banked as nobody gets poor taking profits. I have an even 10K shares in KHC still and even last night saw more KHC stuff hit the shelves as we shop every few days here.
ALLDAY1 profile picture
I see the trolls are out early tonight acting strange and there is no full moon. Of course in my world the sky is always bright as I have nothing to hide.

Hoping for a dividend on increase on XOM since ex-day is 5/12 . But if not I am OK with that .

XOM should spin off the carbon capture business to shareholders. Pay down debt. The greens would have a feeding frenzy, the left leaning politicians would rush to fund the channel project, who knows reddit might take it to the moon. Talk about unlocking value...
Douglas Payne profile picture
@Diabando IF wishes were horses then Beggars would ride.
Source: Morningstar
Definition: Total annualized return -- cap appreciation plus divs in percentage

For past 5 yrs: Xom -3 ; S&P 500 16
10 yrs: Xom 0.05 ; S&P 500 14
15 yrs: Xom 3 ; S&P 500 10

Xom routinely doesn't even surpass inflation.
bigbenorr profile picture
@patientmike until it does
Ptstanford profile picture
@patientmike The dividend growth well surpasses inflation. 3yr growth about 4% , 10 year about 7%.

It will take a while for the REAL energy sector to work through the hysteria overhead. I think the world is beginning to realize that it cannot function on wind and sun alone, or even partially to any significant degree.

So unless the world is going nuclear, then Oil and Gas are the only viable energy sources for the constantly growing demands.

If you've bought XOM recently, you've bought in at about a 50% discount to the old highs with a reliable and growing dividend.

What's not to like?
@Ptstanford What's not to like is the factual past performance I listed. Another response that doesn't recognize I was speaking to long term holders. Evidently, past performance doesn't matter to many. It does to me in my 45 yrs of investing. And Stanford, it's total return not just dividend growth.
I can't help but wonder if the Harris Administration would consider funding part of Exxon's CC&S proposal since it would bury carbon instead of release it in the atmosphere ..... sure Lefties might not want to help an O&G company but it would be great for the environment so ..... there is hope they might bite if they do Exxon is going to pop big time. If not, I still say WTI and Brent stay around $62 and $66 for about two years which means Exxon lingers around $59-$60 for the next 20 months. Maybe, around Jan 2023, when supply is below demand for oil, WTI and Brent get to $68 and $72 and that would push Exxon to $65+. People thinking Exxon can hit $80 without the CC&S project are being very optimistic IMHO. There is no reason for Exxon to break $60 unless WTI and Brent move up and I don't think they will for at least 20 months. I think, it is more of a hope, that starting in 2023 oil supply gets tight.
@cecilbatt11 Biden brought up carbon capture during his debate with trump. Surprising since I thought it was something trump was supposed to bring up
HATEFEEBAY profile picture
@cecilbatt11 If you can convince them it will hurt white people, they will fully fund the idea.
@HATEFEEBAY Exactly right.
geologist profile picture
Thank for the article. This topic ma have already been discussed, but how bad do you think that the India COVID catastrophe will impact world crude oil prices?

India is the 2nd or 3rd largest crude oil importer and if India is shut down that will impact world oil prices and it will like wise have a negative impact on Exxon share price.

India is a significant risk for Exxon IMHO. Thanks.
@geologist I think the risk is baked into the current share price, when WTI was at $65 in March XOM traded $60-$62. WTI just hit $65 again but XOM is $58-$59.
ALLDAY1 profile picture
Well I did what I had planned on this morning and bought 14 shares of XOM at open for $57.83
Hope it continues to go up just looked at price $ 58.62....
At least for today a good move makes mu cost basis for 740 shares at 46.74
not as good as some but I can live with that .

Douglas Payne profile picture
@ALLDAY1 .. YOU MADE THEM FALL INTO THEIR OWN TRAP.. rather than give up your shares cheaply.. it is what you did to the "SMART" money.. Congratulations~!!
ALLDAY1 profile picture
@Douglas Payne
Well I am only concerned about me and all the other so-called experts, pendents who feel they know everything don't know me. I do not claim to know everything and I make mistakes sometimes daily, but I try my best. The only prize is the self satisfaction that occurs if you win, and if you lose and we all do have losers, is to be accountable and move on. I do not tell others how to invest or make recommendations, but I do rejoice in success. Thanks for the comments.

Douglas Payne profile picture
@ALLDAY1 Wild creatures of the forest learn early.. or not at all.. that eyes, ears and nose are put to good use in survival.. Eventually we come to call these. instincts.. May yours always stay sharp~!!
jimidean profile picture
New study explains why nearly 20 percent of electric car owners return to gas.
interesting. I think it will be 25 years or more until EVs > 50% of vehicles on road
craftbrewinfo profile picture
@jimidean Agree it will be a slow adoption, so oil isn't going anywhere for a long while, but, the trend is in the early innings for sure...
jimidean profile picture
@craftbrewinfo i think for most households it will be one EV, one petro, at least for a while, it offers max flexibility
@jimidean I read that too; can you believe people bought an e-car made by Fiat? Just asking for trouble. I love my Toyota hybrids, and I think we will see an increased push to hybrids while we wait for battery technology and infrastructure to catch up, but I also haven't ruled out hydrogen fuel cells either.
maybe i missed it........but what about the long term decline trend in reserves? it is slowly liquidating itself........correct?
purpleboarder profile picture
@murphy666 Read up on the Guyana off shore oil find. It's amazing. This, along w/ shale will provide billions in profits from low-cost oil extraction, for the next 1-2 decades.
Oil and gas is needed all over the world XOM, and CVX, will be fine.
After watching RDS.A cut its' dividend after decades of no cuts, how can someone legitimize XOM dividend not being cut?
@Bobbie B Well, if XOM were to divest itself of its oil assets and invest in wind and solar projects then it probably would have to cut its dividend. But at least it would be legitimate.
Douglas Payne profile picture
Douglas Payne profile picture
@ThisIsMyName The material rebound in free cash flow and the revaluation of XOM it could start are the biggest reasons to buy Exxon Mobil now, besides the 6.1% yield the stock pays. Long term, the growth opportunity in this field is potentially Exxon Mobil’s biggest growth opportunity... illegitimate or not.. MONEY SPENDS~!!
SeriousUsername profile picture
Couldve bought this at a 10% yield not long ago ,nobody sane thought oil was gonna go away within a year .
But now that its almost doubled in shareprice and activist investors piled onto this company like maggots pile on a corpse,now we get articles about buying bags.
Heck nah.
David-McCormick profile picture
@SeriousUsername You are correct. The train left the station for all but the comatose and the "green." Last year was the first time since the early 1980s one could buy XOM while it paid over 10 percent dividend. in the intervening years, it split 4 for one since then. I have been an XOM holder for decades. I sold my "high tax basis" XOM and harvested the tax losses. Last year gave me a chance to buy it back in that $35-40 range and add to positions. Again, you are correct. It might still be a buy, but the easy money in XOM was made already.
craftbrewinfo profile picture
@David-McCormick indeed... XOM ( well oil stocks) carry too much risk for a long term hold as a dividend stock (i.e. will they or won't they cut the dividend). I bought with a trade in mind and that's what I did. bought at $41 and sold at $59. Those profits became Home depot. I can sleep better now. Not too bad for a few month's hold.
Douglas Payne profile picture
@David-McCormick .. who bought on March 12, 2020? Not the faint hearted.. that's for sure~!!
RickcarinoNYC profile picture
Buying this stock now is best advice I can offer.
Dividend yield and stock appreciation will be best for many years. XOM stake in Iraq is 32%
Iraq is willing to buy and XOM is willing to sell to
PAY OFF DEBT. Imagine price jump when news will come out.
Long it now.
Best Gas on The Planet but any move South in price of these shares will be about EVe's.
Sell in May and Go Away.........
Am bookmarking
The Asian Investor profile picture
@bearcub1936 Thank you very much.
Hi, any thoughts on how much a potential dividend increase could be?
@Jay_1974 one penny. Look back at the last 2 increases. They were huge. Darren was overzealous the first time. He won’t make the same mistake.
@Anthony Lanza thank you
The Asian Investor profile picture
@Jay_1974 Could be $.90-share or more
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