Is Exxon Mobil Corporation (XOM) a Buy?

No company can maintain such a dividend track record without the underlying financial results to support such increases. To that end, in 2012 Exxon Mobil booked $453 billion in sales. The company’s diluted earnings per share rose 15% from the previous year, and Exxon’s fantastic financial position remained intact.

Exxon Mobil Corporation (NYSE:XOM) reduced its long-term debt by $1.4 billion last year and holds a debt-to-capital ratio of just 6%. That’s why Exxon is one of only four U.S.-based, non-financial firms to hold a triple-A credit rating from Standard and Poor’s.

Moreover, the company achieved an average 25% return on capital. Clearly this is an industry leader that executes strongly on its key growth initiatives.

Exxon: Slow and steady

One of the best reasons for owning a company like Exxon Mobil is its dividend. As the world’s population grows and the middle classes expand in the emerging market economies, Exxon Mobil Corporation (NYSE:XOM) will be there, and the company’s shareholders will continue to receive those quarterly checks in addition to solid annual dividend increases.

That being said, if you’re looking for yield in the integrated energy space, you can do better. Exxon Mobil yields 2.75%, which is good, but not great in an industry rife with dividend payers.

Competitor ConocoPhillips (NYSE:COP) yields 4.25%, meaning Conoco’s shareholders are receiving 150 basis points more in yield than Exxon’s. Chevron also yields more than Exxon, with a 3.3% dividend yield at recent prices.

You can certainly do worse than a global industry leader with a decent dividend yield and fortress balance sheet. In that sense, investors can buy Exxon Mobil, reinvest those dividends for the next 20 years or so, and do well for themselves.

But if you have particular income targets, you may want to dedicate your capital to Conoco or Chevron. In the end, I see all three as long-term winners, and investors of each company can look forward to many profitable years ahead.

Robert Ciura has no position in any stocks mentioned. The Motley Fool recommends Chevron. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Is Exxon Mobil a Buy? originally appeared on Fool.com is written by Robert Ciura.

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