5 Best Widow and Orphan Stocks To Buy

2. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 75

Dividend Yield as of December 21: 3.35%

Exxon Mobil Corporation (NYSE:XOM) is an American energy giant that explores for and produces crude oil and natural gas in the United States and internationally. It operates through Upstream, Downstream, and Chemical segments. Exxon Mobil Corporation (NYSE:XOM)’s dividend payments to shareholders have grown at an average annual rate of 5.9% over the last 40 years. It is one of the premier widow and orphan stocks to invest in. 

On December 8, Exxon Mobil Corporation (NYSE:XOM) said it will expand its stock buyback plan to $50 billion through 2024, including $15 billion this year. The company said it expects to “double earnings and cash flow potential” by 2027 compared to 2019, while also remaining on track to deliver nearly $9 billion in structural cost savings by the end of 2023 as compared to 2019 levels. Exxon Mobil Corporation (NYSE:XOM) raised its quarterly dividend by 3.4% to $0.91 per share, which was paid to shareholders on December 9. 

Piper Sandler analyst Ryan Todd on December 19 maintained an Overweight rating on Exxon Mobil Corporation (NYSE:XOM) but lowered the price target on the shares to $127 from $131. “Even after two years of outperformance,” the analyst remains constructive on the energy complex into 2023. He sees refining “as likely to lead the charge” in 2023, with sustained tightness in product markets driving a similar margin environment to 2022.

According to Insider Monkey’s Q3 data, 75 hedge funds were long Exxon Mobil Corporation (NYSE:XOM), compared to 72 funds in the prior quarter. Rajiv Jain’s GQG Partners is the biggest stakeholder of the company, with 33.8 million shares worth approximately $3 billion. 

In its Q2 2022 investor letter, First Eagle Investments, an asset management firm, highlighted a few stocks and Exxon Mobil Corporation (NYSE:XOM) was one of them. Here is what the fund said:

“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industry wide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”