Jim Cramer’s December Portfolio: Top 10 Stocks to Watch

2. Exxon Mobil Corp (NYSE:XOM)

Number of Hedge Fund Investors: 86

Jim Cramer was recently asked about ExxonMobil. He recommended investors stay away from the stock and said it’s overvalued when compared with Chevron.

“I think Exxon Mobil Corp (NYSE:XOM) is overvalued versus Chevron. Now, that has been the wrong call to make in 2024. Until recently, these stocks, by the way, are not stocks you want to own because they are actually high-priced, high-earning multiple stocks with yields that are not as great—only because the stocks are still too high.”

Exxon continues to manage its debt effectively, lowering its debt-to-market-cap ratio to 13.5% from 16.7%. The company’s debt-to-equity ratio remains well below that of its peers, while its liquidity ratios significantly exceed the industry median.

Recent acquisitions and expansion into areas like carbon capture, hydrogen, and renewable fuels should keep the company stable, even if oil prices slump. At the Barclays Energy-Power Conference, Exxon Mobil Corp (NYSE:XOM) CEO emphasized the company’s focus on decarbonization, including the Baytown hydrogen project, which is set to be the world’s largest low-carbon hydrogen facility by 2029.

According to Goldman Sachs, oil demand won’t peak until 2034, even with the push for electric vehicles and green energy. Goldman forecasts peak oil demand at 110 million barrels per day by 2034, potentially rising to 113 million barrels by 2040 if EV adoption is slower.