Exxon Mobil Corporation (XOM): Safe Haven for Oil Dividend Investors During the Oil Crash

That being said, as you can see below, analysts are not expecting much in the way of payout growth over the next three years. That’s because, as the oil crash drags on longer than many thought possible, investors need to come to grips with the fact that Exxon’s dividend destiny isn’t entirely in management’s hands.

Sources: Yahoo Finance, Fastgraphs, Multpl.com, Factset Research, Moneychimp.com

In other words, Exxon investors can likely expect at least a token, $0.01/quarter increase in 2017, 2018, and 2019, even if oil prices remain at today’s low levels. This type of dividend increase would only add $166 million, $332 million, and $498 million to the dividend’s annual cost over the next three years, respectively.

However, predicting if and when the company can return to its historic 7% payout growth rate will depend entirely on how long, and strongly, oil & gas prices recover; something that no one has ever been able to do, and is likely impossible.

That being said, thanks to incredibly efficient operations, a world class management team, and a fortress-like balance sheet, Exxon’s long-term dividend growth rate could eventually return to around 6% to 7% whenever energy prices inevitably rise.

Two key facts support this forecast. First, ExxonMobil currently has numerous projects it is investing its much reduced capital expenditure budget on that will soon come online and help to boost cash flow in the coming years.

In fact, in 2016 and 2017, despite massively cutting spending, and costs, Exxon has 10 major projects scheduled to come online.

The goal of these projects is to boost total production to as much as 4.4 million barrels per day by 2020. However, more important than a slight increase in production is the company’s increasing focus on liquid production over gas.