Exxon a 'Steady Eddie' for income and growth

With 2 decades of consistent performance, this is the quintessential buy-and-hold stock.

By TheStockAdvisors Jun 19, 2012 4:42PM
By Chuck Carlson, DRIP Investor

One of the first DRIPs I ever bought was ExxonMobil (XOM), in April 1992. Adjusted for subsequent stock splits, my cost basis on those initial shares is $14.63 per share.

I’ve never taken a single penny in dividends over the years, preferring to reinvest my dividends back into the stock. And that dividend has increased on average 5.7% per year over the last 29 years and was recently boosted 21%. The bottom line is that ExxonMobil has been a fabulous stock for long-term investors like me.

In many ways, Exxon is the quintessential buy-and-hold stock. One reason is that the stock doesn't force investors to make decisions.

In the 20 years I've owned the stock, Exxon has rarely been at the top of the leader board. Thus, I never had to face the prospect of locking up profits before the bubble burst on the stock. There was never a bubble, never a huge and sudden price gain that would practically force you to sell your shares.

Likewise, Exxon has rarely been at the bottom of the heap. I can’t recall a time during the two decades I’ve owned the stock that Exxon’s performance was such that I considered selling to protect myself from further collapse.

I’ve always felt that "Steady Eddie" quality of Exxon was underappreciated on Wall Street. That the stock is in a sector notorious for huge price swings amid big fluctuations in oil prices makes Exxon’s consistent long-term performance all the more impressive.

The stock currently sports an overall Quadrix score of 93 (out of a possible 100) and a value score of 81. (Quadrix is our proprietary ranking system.)

Exxon offers a very user-friendly dividend reinvestment plan. Initial purchases may be made directly. Minimum initial investment is $250. The minimum on subsequent purchases is just $50.

Exxon doesn’t charge a penny in fees to buy shares in the plan. The plan includes the ability to put your Exxon DRIP investments in a Roth or Traditional IRA.

Even if oil prices continue to weaken from their recent highs, I still feel quite comfortable holding Exxon and recommend the stock for investors seeking decent appreciation, a healthy yield of 2.8%, and good dividend growth.

More from TheStockAdvisors

Tags: XOM

VIDEO ON MSN MONEY

0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

MARKET UPDATE

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes

[BRIEFING.COM] The stock market punctuated July with a broad-based retreat that sent the S&P 500 lower by 2.0% with all ten sectors ending in the red. The benchmark index posted a monthly decline of 1.5%, while the Russell 2000 (-2.3%) underperformed to end the month lower by 6.1%.

To get a better feel for what led to today's retreat, we'd like to look back to Wednesday, when the market had ample reason to rally, but did not. Instead, it ended basically flat after a sloppy day of ... More


Currencies

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.