1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 92
Exxon Mobil Corporation (NYSE:XOM) is one of the 4 most diversified energy companies that explores and produces crude oil and natural gas. Its upstream segment explores for and produces crude oil and natural gas, while the Energy Products segment offers fuels, aromatics, catalysts, and licensing services.
ExxonMobil is a global leader in LNG, with interests in projects worldwide, producing 23 million tons annually. Key investments include Gorgon LNG, PNG in Papua New Guinea, and LNG trains in Qatar. The company aims to increase its capacity to 27 MTPA by 2027, with significant projects like the $10 billion Golden Pass LNG in the U.S. and the North Field expansion in Qatar, targeting 40 million tons per year by 2030.
Given its status as a critical player in the oil and gas business, the company presents as a potentially attractive option for investors seeking stability in their portfolio. Its financial strength, backed by a low Price-to-Earnings (P/E) ratio of 12, demonstrates investors’ trust in the firm’s ability to generate profits. Moreover, the firm’s stable price movements underscore its strong market standing, providing investors with a dependable investment choice in the frequently volatile energy industry.
Exxon disclosed Q2 earnings that exceeded expectations and sales figures that surpassed initial projections. Adjusted earnings climbed by 10% compared to the previous year, reaching $2.14 per share, following a sequence of four quarters marked by a decline in earnings growth. Sales surged by 12% to $93.1 billion, following a period of five consecutive quarters characterized by decreasing sales. The energy major had maintained its status as one of the most lucrative companies in the United States.
With more than forty years of steady dividend increases, Exxon Mobil Corporation (NYSE:XOM) is a top choice for dividend aristocrat stocks for investment today. Its dividend yield has averaged 2.20% annually in the last five years. The company has committed to investing $20 billion and $25 billion yearly in capital expenditures until 2027. The company’s dividend yield is 3.29%, affirming a consistent shareholder return.
The number of hedge funds investing in Exxon Mobil Corporation (NYSE:XOM) increased from 81 in the first quarter of 2024 to 92 in the second quarter of 2024.
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)
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