We recently published a list of 11 Best Safe Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Exxon Mobil Corporation (NYSE:XOM) stands against other best safe stocks to buy according to hedge funds.
In times when you never know what you’ll wake up to the next morning, playing safe seems to be the wisest choice. Amid consistent market shifts and global uncertainties, it’s difficult not to lean towards reliability. With rising global recession risks and political uncertainties, protecting the capital has become a priority for many. As Charlie Munger, Vice Chairman of Berkshire Hathaway, once said,
“The idea of investing in a company just because it’s safe is not necessarily a good idea. But it’s a much better idea than investing in something that is clearly risky.”
If we think about a “safe” stock, a low-risk stock usually comes to our mind. While it’s true, there is even more to it. A safe stock generally stems from a well-established company possessing a strong balance sheet, a track record of decent performance, solid market positioning, and a dividend history. So, when looking for a safe stock, it’s important to look for not one, not two, but all of these metrics. In its entirety, these are usually “blue chip stocks” that are market leaders in the industries they operate.
Hedge funds, recognized for their strategies and in-depth market understanding, have long advocated for such stocks for their reliability and resilience. These managers carefully study the market trends and then weigh in on businesses that are deemed to deliver both value and predictability.
As reported by Reuters, hedge funds are fleeing the stocks of companies that are providing what customers want, and what they don’t need. As the signs of a global recession are becoming more and more evident, hedge funds are dumping their positions in consumer discretionary. “Hedge funds dumping consumer discretionary stocks strongly suggests they’re bracing for economic trouble, likely a recession,” mentioned Bruno Schneller, the Managing Director at Erlen Capital Management.
Similarly, a Goldman Sachs report, comparing the gains by Hedge Fund VIP basket and the broader market, indicates that the top 50 stocks preferred by hedge funds have collectively returned 10% in 2025 relative to the market’s 3% gain.
In a “Low-Risk Stocks Outperform within All Observable Markets of the World” paper by Nardin Baker and Robert Haugen, the differences in performance by low-volatility stocks and high-volatility stocks in developed and emerging equity markets worldwide were compared. The results revealed that stocks with low realized volatility exhibit higher future returns at lower risk than stocks with relatively higher realized volatility, thus contradicting the traditional inference that attributes higher returns to higher risks. Given this, we will take a look at some of the best safe stocks to consider.
Our Methodology
In compiling a list of the 11 best safe stocks to buy according to hedge funds, we used Insider Monkey’s database of over 1,000 hedge funds, as of Q4 2024, and picked mega-cap stocks with positive five-year returns and next-year revenue growth. All of these factors are considered to ensure that the stocks selected yield low volatility and high safety. In addition, we also considered stocks that pay dividends to shareholders to ensure safety and reliability. The stocks are ranked in ascending order of the hedge funds having stakes in them.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Aerial view of a major oil rig in the middle of the sea, pumping crude oil.
Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge funds holding: 104
Forward Dividend: $3.96
Exxon Mobil Corporation (NYSE:XOM) is among the largest global energy providers and chemical manufacturers that develop and apply advanced technologies. The company explores, develops, and markets oil, gas, and petroleum products. With mainly three main segments: Upstream, Downstream, and Chemical, XOM is committed to delivering safe energy solutions while fulfilling its environmental responsibility.
Like any other enterprise, Exxon Mobil Corporation (NYSE:XOM) has faced various challenges over the last few years due to global economic and political uncertainties. And yet, it keeps going strong, exhibiting resilience, decent performance, and strategic market footing.
We expect natural gas to be a key driver of Exxon Mobil Corporation (NYSE:XOM). In the last quarter of 2024, the company showcased a 9.0% YoY surge in natural gas, producing 8,331 million cubic feet per day. While this was attributed to the hike in both price and demand, the upsurge is anticipated to be even more in the times to come, provided the power sector demand and LNG shipping capacity. This can further be reinforced by the claims by not only the U.S. Energy Information Administration (EIA) expecting a rise in LNG exports but also the International Energy Agency foreseeing a demand-supply imbalance translating to further upward pressure on prices.
That’s not it. With the global expansion of data centers, the company’s growth is just getting started. In this AI era, the total count of data centers is forecasted to increase to 6,111 this year and stand at 8378 in 2030. As data centers increase electricity consumption, this could mean a natural gas price push, and thus enhanced revenues for Exxon Mobil Corporation (NYSE:XOM).
According to analysts, Exxon Mobil Corporation (NYSE:XOM) will witness an upside of around 15%, which makes it one of the best safe stocks. Although not something remarkable, the poor expectations for the broader market by the Economy Forecast Agency make the XOM upside figure fairly attractive.
Overall, XOM ranks 10th on our list of best safe stocks to buy according to hedge funds. While we acknowledge XOM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
