1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 104
As a prominent player in the global energy sector, Exxon Mobil Corporation (NYSE:XOM) is extensively involved in the exploration, production, refining, and distribution of gas, oil, and petrochemical products. With operations spanning several continents, the company continuously strives to advance its low-carbon initiatives while optimizing production efficiency.
Exxon Mobil Corporation (NYSE:XOM) reported earnings of $34 billion in the year ended 31 December 2024, which was the third-highest amount in the previous ten years. This success was supported by an outstanding Return on Capital Employed (ROCE) of 13%, which rose to 17% when cash balances and projects under construction were excluded, along with $55 billion in operating cash flow. Exxon has demonstrated a long-standing commitment to providing value to its shareholders, maintaining its $20 billion annual buyback program and increasing dividends for 42 consecutive years.
Moreover, Exxon Mobil Corporation (NYSE:XOM)’s expansion in the Permian Basin and Guyana is expected to improve its production prospects. With a projected Q3 2025 launch date, the Yellowtail project is expected to significantly increase the company’s global output. Permian volumes are expected to reach all-time highs as a result of the Pioneer acquisition, which is expected to generate over $3 billion in annual synergies. In addition, Exxon Mobil is moving forward with important downstream projects like the Singapore Resid Upgrade and the China Chemical Complex, which are expected to generate over $3 billion in additional revenue by 2026.
Despite short-term challenges in softening chemical markets, Exxon Mobil Corporation (NYSE:XOM) maintains strong growth momentum due to its record-high liquids production and strategic investments. Together with its ongoing production growth and expansion plans, the emphasis on sustainable energy solidifies Exxon Mobil’s standing as one of the top natural resource stocks for investment.
Overall, Exxon Mobil Corporation (NYSE:XOM) ranks first on our list of the best natural resources stocks to invest in according to hedge funds. While we acknowledge the potential of XOM, 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: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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.
