Exxon Mobil: 30 years of rising dividends

Buybacks and payouts make this stock a safe, long-term buy for growth and income.

By TheStockAdvisors Jul 8, 2013 9:53AM

Oil derricks © Comstock/CorbisBy Genia Turanova, Leeb Income Performance


As the U.S. economy expands, and especially if Europe finally exits its lengthy recession, we can also expect an accompanying increase in oil demand -- and higher oil prices.


Long term, Exxon Mobil (XOM) expects global energy demand to grow by about 35% before 2040. That means there is significant profit potential if Exxon can stay on top of its game.


This huge company pays a healthy and safe 2.8% annual dividend. In fact, it has paid some $44 billion in dividends in the past five years alone and has increased its dividends every year since 1983, including a 10.5% hike in the second quarter of this year.


But that's not all. The company bought back $20 billion in its shares in 2012 alone and a total of $101 billion worth of shares in the past five years.


Overall, because of the buybacks, the number of outstanding shares has been reduced by 35% since Exxon merged with Mobil 14 years ago.


In addition, Exxon in 2012 had a notable 25% return on average capital employed, higher than the average of the five preceding years -- and the best performance among its peers.


Indeed, its 2012 earnings of nearly $45 billion represented a 9% increase from the year before.


Its reserve replacement ratio, an important measure for all oil producers, stands at 115%. It's especially remarkable, given the shrinkage of global oil and gas resources and the increasing expense and difficulty of finding new reserves.


Even more remarkable, however, has been the commitment at Exxon to raising the environmental bar.


In 2012, for example, the company cut its carbon dioxide equivalent emissions by nearly 10 million metric tons -- roughly three-quarters -- via increased energy efficiency and cogeneration and 25% from cuts in gas flaring.


Another reason we like Exxon is its integration across all aspects of the oil and gas business. The company has a huge, diverse and well-balanced resource base. It is also the world's largest integrated refiner and lube basestock manufacturer, and its chemical company is the highest-return business among peers.


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Tags: oilXOM
35Comments
Jul 8, 2013 10:51AM
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The reason people lose money in stocks is because they don`t go with consistant winners

like JNJ and XOM.People want fast money and not boring winners.Most small stocks

do`t have consistant earnings.Most hotshot small companies can`t be counted on.

Jul 8, 2013 11:41AM
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Stick with this winner until they figure out how to fly three hundred people cross country with solar panels, a windmill, or a swimming pool full of algae.

 

Or try and get politicians to buy in and fund your latest green scheme and bank money till it goes belly up!

Jul 8, 2013 10:33AM
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Sound analysis. The stock sounds like a winner!
Jul 8, 2013 10:50AM
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My pension is with them...sounds good to me.
Jul 8, 2013 11:03AM
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A little closer to the end today... zero positive movement in the economy and more than 100 points of baloney fiat money from Bernanke to get corruption going this week. Count the days and ask what you will do when this crashes.
Jul 8, 2013 2:01PM
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No surprise profits are up, gas prices are up.  Come on now lets say it together, "Price fixing".

Jul 8, 2013 4:52PM
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Why doesn't Exxon Mobile pay off the National Debt and supply every home in the south west with free solar and pay the education costs for American children for the next 20 years God knows they make enough money and trash the earth, water and air enough. Oh and they didn't clean the Gulf the Gulf cleans itself...

 

Jul 8, 2013 12:35PM
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You keep putting your wealth in a has-been basket that isn't supported globe-wide by anyone under 50. People aren't dumb, aren't missing the this or that brag, they're suppressed by geezers who have lived too long already. That's only going to last so long then... people make change. Don't be looking for an army. As billions of disgruntled people stop buying "in", in goes out (your holdings included) and a new direction takes precedent. Pretty sure people are tasting Big Brother, proclaiming it tastes like crap and are processing the shift through natural selection. Heard today- the removal of opportunity restores a fundamental... eat or be eaten. as much as you think you are a tiger, you are more likely the paper version. Create a premise for war and you get what you played for.

Jul 8, 2013 11:31AM
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Once again we`re making money in the market.Thank me, I voted Obama, unless you

liked the market down 37% with Bush.Who wants to retire rich anyway?

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