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Exxon Mobil: After The First Quarter Earnings

May 12, 2023 10:23 AM ETExxon Mobil Corporation (XOM)58 Comments


  • The Exxon Mobil Corporation forward price-earnings ratio is pretty low in this rather expensive market.
  • The forward price-earnings ratio is likely to be even cheaper when one factors in the cost reduction efforts underway.
  • The low price-earnings ratio conveys low expectations about the future that Exxon Mobil Corporation management is likely to beat.
  • The industry challenges, particularly the challenges from 2015-2020, are very unlikely to repeat.
  • Exxon Mobil total returns are likely to rise to an annual rate of low to mid teens as management cost reduction and growth plans become effective.
  • This idea was discussed in more depth with members of my private investing community, Oil & Gas Value Research. Learn More »

ExxonMobil"s Baton Rouge Refinery, Louisiana, USA


Exxon Mobil Corporation (NYSE:XOM) recently reported first quarter earnings. Earnings are widely expected to be below what they were in fiscal year 2022. But much of the industry sits below historical average valuations.

Earnings Reports

The company surprised

I analyze oil and gas companies like Exxon Mobil and related companies in my service, Oil & Gas Value Research, where I look for undervalued names in the oil and gas space. I break down everything you need to know about these companies -- the balance sheet, competitive position and development prospects. This article is an example of what I do. But for Oil & Gas Value Research members, they get it first and they get analysis on some companies that is not published on the free site. Interested? Sign up here for a free two-week trial.

This article was written by

Long Player profile picture

Long Player believes oil and gas is a boom-bust, cyclical industry. It takes patience, and it certainly helps to have experience. He has been focusing on this industry for years. He is a retired CPA, and holds an MBA and MA.

He leads the investing group Oil & Gas Value Research. He looks for under-followed oil companies and out-of-favor midstream companies that offer compelling opportunities. The group includes an active chat room in which Oil & Gas investors discuss recent information and share ideas. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of XOM either through stock ownership, options, or other derivatives. 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 (58)

Savita (BoFA) is bullish on Energy & Commodities

Looking to buy CNQ when it gets to 50 or lower..

High Dividend Yield - 4.79%
High Revenue Growth - 35.93%
Low Debt to Capital ratio - 21.19%
High Gross Margin - 54.01%
Robust FCF - 10.95 B$
Low Price/Cash Flow - 4.38
Long Player profile picture
@Sleepless@FED Now that one is totally upstream which is a whole different story
PT Larry profile picture
Thanks for the article.
Fantastic write up. Investors should realize that apart from dividend raise, XOM is doing a massive share buy-back which ultimately will increase shareholders returns. I am in XOM for a long time.
Happy Investing !
I sold my XOM shares after a nice run and reinvested the proceeds in my midstream pipeline basket of stocks. There were 2 reasons that led to the sale: 1. CVX, my largest single stock position raised the dividend by 6% two years in a row and XOM offered only a 3% increase last year; and, 2. The rumored XOM purchase of Pioneer, which is my second largest energy holding, left me wanting to be on the Pioneer side of this type of transaction. XOM is a great company, but I just don’t get the sense that shareholders will be a priority going forward.
Everyone has his/her own reasons to buy/sale add/reduce a position; there are infinite reason one way or another. Thank you for sharing yours.
DEMS attacked US fossil from day one--And their insanity of Climate Cult is now releasing regs from the Swamp EPA that attempt to eliminate nat gas from power plants--- 3-4 x higher costs and a massive reduction in power reliability-

Dems Climate Cult is taking the US down the energy suicide path---with their Marxist friends from the EU----all for China's benefit as China controls the worlds minerals supply chain-


Enough---wake up America---the insane are running the asylum.
Long Player profile picture
@CJlove4all So you don't like record production under Biden? You also must not like the fact that Biden now has more permits released than Trump and that difference will only widen from here on?
Then there is the projects that Biden approved?
More progress in two years for oil and gas than Trump in four years and its all because Biden filled in the empty desks. The marxist left office in 2021
@Long Player permits mean nothing unless u can drill.
Long Player profile picture
@Charleyman1 And that drilling is happening. XOM plans to grow production in the Permian at least 25% this year. They just opened the equivalent of a midsized refinery to handle that oil. Record production is likely to be reported this quarter for the industry....next quarter at the latest.
One thing I pay attention to is execution. Biden has helped the industry tremendously through execution. Trump nearly killed it.
Interesting opinions on dividend. It’s yield happens to be proportional to its price and exxon was recently at a high of S119for yield of 3.06%. at todays closing price of $105.78 the yield bumps up to 3.44%. If the stock price increases 30 or 40% management simply can’t raise the dividend accordingly. The math does not work. Investors are getting $3.64 per share and that’s what counts
Great points! Even higher returns when you go out in the deep end of the option trade.
People complan about XOMs dividend but how quick they forget that XOM didnt cut their dividend when most of the others majors did. This is a great run copany.
Yes. It is ! Great point !
Always amazes me how much investors like XOM given paltry dividend! Hey, I own it. Also wrapped it with URA & ICLN to cover all bases. All should do well over next 30 years for a retired person like me.
rollwave2023 profile picture
@Pippy54 many investors like myself don’t care about dividends
@rollwave2023 I like dividends as they are proof of cash flow and future cash flows (assuming management is reputable). Also too many companies waste cash of buying back stock at high prices or giving out options galore.
rollwave2023 profile picture
@Pippy54 not an either or and has nothing to do with the quaility of a stock or company tons of high yield holdings that are not the best investments
XOM is a good company but isn't dividend investor friendly. Their dividend growth rate over the past few years has been pathetic. Especially when considering the amount of revenue they've pulled in.
Take the dividen & applied a long deep option covered calls play. You will be surprise the total returns you can make on a solid, well run business like Exxon.
CyclePilot profile picture
@JustLearning63 I'd argue it's more dividend friendly than any of its peers. They continued to pay shareholders even during the pandemic, when everyone else suspected cut. That means something.......
I feel like I am the only one who doesn't feel right about the oil sector yet. Looking for another egg down.
If the goal is staying rich (versus getting rich), this looks to be a great vehicle!
secorewb profile picture
Nice article since you went into some specific areas of Exxon.
Exxon is such a massive complex company articles on specific areas are needed for education of investors in SA. Thanks for moving in that direction.
Long Player profile picture
@secorewb Thank you. Glad you liked it
The break-even does it!
Keep compounding the dividend on well managed dividend aristocrat XOM, the world needs oil and gas.
An XOM holder for years. Bought a lot in 2020-21 when it was selling for the mid to upper 30’s. Will hold on to it, and reinvest the dividends into more stock. Love the ride! 🇺🇸👍🙂
Long Player profile picture
@MRMARTY55 That is when I got it and I intend to keep it a very long time
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