1. Exxon Mobil Corp (NYSE:XOM)
Number of Hedge Fund Investors: 81
XOM is an important name in Tortoise Capital’s portfolio.
With over four decades of consistent dividend growth, Exxon Mobil Corp (NYSE:XOM) is one of the best dividend aristocrat stocks to buy now. Over the past five years, Exxon Mobil Corp’s (NYSE:XOM) dividend growth rate came in at 2.20% per year. Exxon Mobil Corp’s (NYSE:XOM) future looks bright. Exxon Mobil Corp (NYSE:XOM) has pledged a whopping $20 billion and $25 billion in annual capex spending through 2027. During the first nine months of last year, Exxon Mobil Corp’s (NYSE:XOM) FCF came in at $28.1 billion. Out of that, just $11.1 billion were paid in dividends. Exxon Mobil Corp’s (NYSE:XOM) payout ratio is just 46%, which means it’s spending for business growth, a healthy sign.
As of the end of the first quarter of 2024, 81 hedge funds reported owning stakes in Exxon Mobil Corp (NYSE:XOM). The biggest stakeholder of Exxon Mobil Corp (NYSE:XOM) during this period was Ken Fisher’s Fisher Asset Management which owns a $3 billion stake in Exxon Mobil Corp (NYSE:XOM).
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)
While we acknowledge the potential of Exxon Mobil Corporation (NYSE:XOM), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. 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.
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