How ExxonMobil Survives Oil Price Cycles and Rewards Shareholders

Core Insights - Exxon Mobil Corporation (XOM) generates most of its earnings from upstream operations, making it vulnerable to commodity price volatility, yet it consistently returns capital to shareholders [1][3] Group 1: Dividend and Share Repurchase - ExxonMobil has increased dividend payments for 43 consecutive years, ranking as the second-largest dividend payer among S&P 500 companies [2][6] - The company plans to repurchase $20 billion of its shares this year and aims to maintain this pace next year [2] Group 2: Financial Resilience - Despite its vulnerability, ExxonMobil has demonstrated resilience through various business cycles, attributed to access to low-cost oil and natural gas resources and a strong balance sheet [3][6] - ExxonMobil's debt-to-capitalization ratio is 13.6%, significantly lower than the industry average of 28.7% [3] Group 3: Comparison with Peers - Diamondback Energy Inc. (FANG) and ConocoPhillips (COP) also exhibit resilience due to lower debt levels, with debt-to-capitalization ratios of 26.3% and 26.6%, respectively [4][6] - Both FANG and COP have operations in the Permian Basin, which helps them navigate low oil prices [4] Group 4: Stock Performance and Valuation - XOM shares have increased by 14.5% over the past year, slightly underperforming the industry average of 15.7% [5] - The company trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 7.57X, above the industry average of 4.77X [8] Group 5: Earnings Estimates - The Zacks Consensus Estimate for XOM's 2025 earnings has been revised downward over the past week [10]