10 Best Affordable Stocks To Buy Right Now

2. Exxon Mobil Corporation (NYSE:XOM)

Forward P/E Ratio as of September 16: 12.41

Number of Hedge Fund Holders: 92

Exxon Mobil Corporation (NYSE:XOM), a leading American multinational in the oil and gas sector, engages in the exploration and production of crude oil and natural gas both domestically and internationally.

For the second quarter of 2024, Exxon Mobil Corporation (NYSE:XOM) exceeded earnings expectations, reporting an EPS of $2.14, compared to the anticipated $2.02. The company posted $9.2 billion in earnings, marking its second-best Q2 performance in the past decade. Exxon Mobil Corporation (NYSE:XOM) also achieved record production in Guyana and the Permian Basin, where the latter’s output reached 1.2 million barrels per day. Alongside strong operational results, the company returned $9.5 billion to shareholders, including $4.3 billion in dividends.

With over 40 years of consistent dividend growth, Exxon Mobil Corporation (NYSE:XOM) averages a 2.20% yield over the past five years and plans to invest between $20 billion and $25 billion annually in capital expenditures through 2027.

Hedge fund interest in Exxon Mobil Corporation (NYSE:XOM) rose from 81 in Q1 2024 to 92 in Q2 2024.

Madison Dividend Income Fund stated the following regarding Exxon Mobil Corporation (NYSE:XOM) in its first quarter 2024 investor letter:

“This quarter we are highlighting Exxon Mobil Corporation (NYSE:XOM) as a relative yield example in the Energy sector. XOM is a leading integrated oil and natural gas company. It has upstream assets that develop and produce oil and natural gas, along with downstream refining and chemical manufacturing assets. We believe it has attractive low-cost acreage in the Permian basin and has a sizeable growth opportunity in Guyana. Further, we think XOM has a sustainable competitive advantage due to size and scale, and its ability to integrate refining and chemical assets provides a low-cost advantage versus competitors.

Our thesis on XOM is that it will grow production volumes of oil and gas moderately over the next few years, while limiting excessive capital investment that plagued the industry from 2014-2020. Production growth will come from its 2023 acquisition of Pioneer Natural Resources, which is the largest producer in the Permian basin. XOM plans to double its Permian output by 2027, to 2 million barrels per day. Capital spending will be limited to $20-25 billion per year through 2027, which should allow for significant amounts of cash to be returned to shareholders including a $35 billion share repurchase program and continued dividend increases. Higher oil prices would provide a tailwind to our thesis but are not necessary. We think XOM can grow earnings and cash flow if oil prices remain above $60 per barrel…” (Click here to read the full text)