Exxon Mobil: Not The Place To Be If You Are 'Seeking Alpha'

Ronald Ferrie
3.19K Followers
(9min)

Summary

  • Exxon Mobil's Q4 earnings slightly exceeded estimates, but the stock remains expensive with a low FCF yield, making share buybacks a poor use of capital.
  • Despite operational achievements in Guyana and the Permian, XOM's stock performance has lagged, up only 2% in 18 months versus the S&P 500's 37%.
  • Alternative investments in my "DIY Supermajor" comprised of Diamondback Energy, Devon Energy, Marathon Petroleum, and Phillips 66 have shown superior returns compared to XOM.
  • XOM's expensive valuation hinders the effectiveness of the company's share buybacks and compresses yield. This makes the company unattractive for those seeking alpha or dividend growth.
Exxon Mobil Headquater in Kuala Lumpur, Malaysia

zodebala

Thesis

Exxon Mobil (NYSE:XOM) recently reported Q4 earnings that slightly exceed analyst estimates. The company looks to continue to develop its FCF growth through the recently acquired Pioneer acreage while also driving developments in offshore Guyana.

However, despite these operational achievements, the

This article was written by

3.19K Followers
I am a Licensed Professional Engineer who works in the Nuclear Power industry. I use my professional working knowledge of the power/energy industries to aid in evaluating potential equities worthy of long-term investment. I invest in income producing equities and rental real estate properties for cash flow and long-term appreciation. My articles are to serve as a platform for presenting the underlying fundamentals and long-term potential of each equity/business.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of PSX 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.

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.

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