1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 86
Exxon Mobil Corporation (NYSE:XOM) is a leading American oil and gas company with a robust portfolio that includes natural gas operations across several regions, such as the United States, Papua New Guinea, Mozambique, and Qatar. Exxon Mobil Corporation (NYSE:XOM) ranks among the best energy stocks to buy.
In May 2024, the corporation completed its acquisition of Pioneer Natural Resources. This merger significantly enhances Exxon Mobil Corporation’s (NYSE:XOM) operations in the Permian Basin, which is known for its high-return development potential. With this acquisition, the company’s production capacity in the Permian is set to more than double to 1.3 million barrels of oil equivalent per day, with projections to reach approximately 2 million by 2027. This growth is supported by an estimated 16 billion barrels of oil equivalent resource across their combined acreage in the Delaware and Midland basins.
On December 2, Exxon Mobil Corporation (NYSE:XOM) announced its Corporate Plan to 2030 and outlined ambitious goals for shareholder value. The company aims to achieve a compound annual growth rate (CAGR) of 10% in earnings and 8% in cash flow while implementing $7 billion in cost savings through improved processes and technology. By investing around $140 billion in major projects and the Permian Basin development program through 2030, Exxon Mobil Corporation (NYSE:XOM) expects to generate returns exceeding 30% over the life of these investments.
The company is focused on achieving cost efficiencies by simplifying its operations and optimizing supply chains. This strategic focus has significantly boosted the company’s financial performance and structural cost savings have reached over $11 billion year-to-date versus 2019, reflecting the effectiveness of these initiatives in improving profitability. Exxon Mobil Corporation (NYSE:XOM) has also made substantial changes to its refining operations, reducing the number of refineries from 22 in 2017 to an expected 15 by the end of 2024. This consolidation aims to create a more advantageous portfolio by divesting less efficient sites. Overall, Exxon Mobil Corporation’s (NYSE:XOM) strategic acquisitions, strong growth projections, and disciplined capital management make it a compelling stock for investors looking for stability and growth potential in the energy sector.
Overall, XOM ranks first among the 12 best gas stocks to buy according to hedge funds. While we acknowledge the potential of gas companies, our conviction lies in the belief that 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.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
