10 Undervalued Dividend Aristocrats to Buy According to Hedge Funds

1. Exxon Mobil Corporation (NYSE:XOM)

Dividend Yield as of December 23: 3.74%

Number of Hedge Fund Holders: 86

P/E Ratio: 13.16

Exxon Mobil Corporation (NYSE:XOM) is a global energy leader involved in exploring and producing crude oil and natural gas. Exxon Mobil Corporation (NYSE:XOM) and Mitsubishi Corporation have recently partnered on a low-carbon hydrogen and ammonia project at ExxonMobil’s Baytown, Texas facility. The project, expected to start in 2029 pending approvals, aims to capture 98% of CO2 emissions, producing up to 1 billion cubic feet of hydrogen and 1 million tons of ammonia annually.

Exxon Mobil Corporation (NYSE:XOM) reported Q3 earnings of $8.6 billion, highlighting the success of its transformation efforts. The Energy Products business has doubled earnings since 2019, driven by cost reductions, strategic investments, and optimized operations. The company has streamlined its refinery portfolio, prioritizing high-value sites, and improved product yields through advanced facilities like the Rotterdam Hydrocracker. XOM’s cost savings have reached $5 billion since 2019.

Despite market fluctuations, diversification in geography and products stabilized earnings, with gains in gas and specialty product margins. Exxon Mobil Corporation (NYSE:XOM) also increased its dividend by 4% to $0.99 per share, marking 42 years of consecutive growth. Upstream production rose 24% to 4.6 million barrels per day, with unit earnings doubling to $10 per barrel. The integration of Pioneer added 770,000 barrels per day, enhancing efficiency and sustainability.

Exxon Mobil Corporation (NYSE:XOM) is a favored energy company among hedge funds, with 86 funds holding long positions in the stock.

Overall, Exxon Mobil Corporation (NYSE:XOM) ranks first on our list of the undervalued dividend aristocrats. While we acknowledge the potential of XOM to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than XOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

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