Exxon Mobil Is Looking Attractive Again, Yielding 3.48%

Core Viewpoint - Exxon Mobil Corporation (XOM) is seen as an attractive investment opportunity following a recent share price retracement, with a focus on its strong dividend yield and potential for capital appreciation [2][3] Company Performance - XOM shares have declined by -11.83% since April, currently yielding 3.48% [2] - The company has repurchased $32.9 billion worth of shares during the 2022 and 2023 fiscal years, reducing the number of shares outstanding by 268 million or -6.32% [9] - In the trailing twelve months, XOM generated $335.35 billion in revenue, with a gross profit of $106.87 billion and a free cash flow of $32.11 billion [11] Future Projections - XOM is projected to grow its earnings at a compound annual growth rate (CAGR) of 10% through 2027, based on a $60 crude oil price baseline [10] - The company expects to produce 3.8 million oil equivalent barrels per day (Moebd) in 2024, increasing to 4.2 Moebd by 2027 [10] - The EIA forecasts that U.S. petroleum production will remain stable through 2050, supporting XOM's long-term growth potential [7] Market Context - The U.S. is currently producing record amounts of oil, with production reaching 13.18 million barrels per day (bpd) in March 2024 [6] - Oil and distillation products accounted for 16% of domestic exports in 2023, generating $323.17 billion [6] - The demand for energy is expected to continue growing, with Big Tech investing heavily in infrastructure that will require more energy [2] Investment Considerations - XOM is considered a Dividend Aristocrat, with a history of growing dividends at an average annual rate of 5.8% over the past 41 years [11] - The company has a liquidity-to-debt ratio of 2.41x, indicating strong financial health [11] - As interest rates are expected to decline, XOM may become more attractive to investors seeking income generation [13]