3/8/25
Exxon Mobil has been a staple in dividend portfolios for decades. As one of the largest energy companies in the world, it has built a reputation for steady cash flow, disciplined capital management, and a commitment to returning value to shareholders. While the stock has its ups and downs, its long track record of dividend payments keeps it at the top of many income investors’ lists.
The oil and gas sector is known for its volatility, but Exxon’s diversified operations across upstream, downstream, and chemicals provide a level of stability that many competitors lack. With a strong balance sheet and a dividend that has stood the test of time, the company continues to be a major player in the energy space.
Now, let’s dive into the key details that dividend investors should consider.
Key Dividend Metrics 🏆💰
📌 Forward Dividend Yield: 3.63% 📈
📌 Trailing Dividend Yield: 3.57% 🔄
📌 5-Year Average Dividend Yield: 4.89% 📊
📌 Annual Dividend Payout: $3.96 per share 💵
📌 Payout Ratio: 48.98% ⚖️
📌 Consecutive Dividend Growth: 41 years 🔥
📌 Ex-Dividend Date: February 12, 2025 📅
📌 Dividend Payment Date: March 10, 2025 🏦
Dividend Overview
Exxon has built a reputation as one of the most reliable dividend stocks in the market. The company has raised its payout for 41 straight years, a streak that very few energy companies can match. While the current yield sits at 3.63%, slightly below its five-year average, it still provides an attractive return compared to the broader market.
Unlike many high-yield stocks that come with questionable sustainability, Exxon’s dividend is well-supported by cash flow. The company maintains a payout ratio under 50%, which leaves room for continued increases and financial flexibility even in periods of lower oil prices.
Over the years, Exxon has proven its ability to manage through different commodity cycles while maintaining its dividend. This consistency is a key reason why it remains a favorite among income-focused investors.
Dividend Growth and Safety
The energy sector is unpredictable, but Exxon has structured its business to handle the swings. Its mix of upstream production, refining, and chemicals provides a buffer when oil prices drop, helping keep cash flow steady enough to support dividends.
- Is the dividend safe? Given the payout ratio of 48.98%, the dividend is in a comfortable position.
- Will it grow? Exxon has historically increased its dividend, but the pace of growth has slowed compared to earlier years.
- Is there enough cash flow? The company’s $55 billion in operating cash flow shows that it has plenty of liquidity to keep paying shareholders.
While Exxon remains committed to dividends, it is worth noting that recent increases have been modest. Investors expecting aggressive growth in payouts may need to temper their expectations, but the stability remains a key selling point.
Chart Analysis
Overall Trend
Exxon Mobil’s stock has been in a downward trend since reaching its peak in late 2024. The 50-day moving average (light blue line), which typically signals short-term momentum, has been trending below the 200-day moving average (dark blue line). This crossover suggests a prolonged period of weakness, often referred to as a death cross, which can indicate bearish sentiment.
However, recent price action shows some signs of stabilization around the $109 level, which could be an attempt at forming a base after the recent decline.
Moving Averages
The 50-day moving average has remained below the 200-day moving average for a while now, reinforcing the idea that short-term momentum is still weak. Prices have tested this level multiple times without successfully reclaiming it. Until the stock moves convincingly above both moving averages, upward momentum may be limited.
If Exxon can break above its 50-day moving average, there could be a shift toward a more neutral or bullish outlook. However, failure to do so could mean continued pressure on the stock.
Volume and Market Participation
The volume chart shows a mix of buying and selling pressure, with notable spikes in late 2024 and early 2025. The largest spikes in volume occurred during downward price movements, which suggests distribution—meaning sellers were in control.
Lately, volume appears to have leveled out, but without a clear increase in buying volume, the stock may struggle to gain upward momentum. If volume picks up alongside an increase in price, that could confirm a reversal is underway.
Relative Strength Index (RSI)
The RSI at the bottom of the chart has been in a low range, indicating the stock was recently in oversold territory. It has started to tick upward, which suggests some recovery, but it has yet to cross into a strong momentum zone.
An RSI that remains below 50 typically suggests continued selling pressure, while a move above 50 would signal improving momentum. Watching whether RSI can break higher in the coming days could help determine if a bounce has real strength behind it.
Recent Price Action
Looking at the last five trading sessions, the stock has shown some resilience by bouncing off recent lows. The wicks on the candles suggest buyers have been stepping in around the $105-$108 range, which could be an area of support.
At the same time, selling pressure has capped gains near $110-$112, creating a short-term resistance level. If the stock can break above this range, it may trigger further buying. However, if it fails to hold above support, another leg down could be possible.
Analyst Ratings
Exxon Mobil has seen a mix of upgrades and downgrades in recent months, reflecting different perspectives on its future performance. Analysts have set the average price target at $129.33, which suggests about an 18.63% upside from the current share price of $109.02.
📈 Upgrades
🔹 Scotiabank 🏦 ✅ – Upgraded Exxon Mobil from hold to buy with a price target of $145. The firm cited strong cash flow, cost efficiencies, and improved long-term energy demand as key reasons for the upgrade. Scotiabank believes Exxon is well-positioned to navigate the evolving energy landscape.
🔹 UBS 📊 📢 – Maintained a strong buy rating while adjusting its price target slightly from $149 to $147. The firm remains confident in Exxon’s disciplined capital spending and steady shareholder returns. While oil price fluctuations remain a factor, UBS expects Exxon’s cash flow strength to support future growth.
📉 Downgrades
🔻 Exane BNP Paribas 🏦 ❌ – Downgraded Exxon Mobil from hold to sell with a new price target of $105. Analysts cited concerns about valuation and a potential slowdown in oil demand, along with risks tied to regulatory pressures on fossil fuel companies.
🔻 RBC Capital 📊 ⚖️ – Reiterated its hold rating multiple times in recent months with a steady price target of $115. RBC analysts are taking a neutral approach, highlighting that while Exxon’s financials remain strong, macro uncertainties in energy prices and global demand could limit significant upside in the near term.
The mixed outlook from analysts underscores the complex nature of the energy sector, with some firms seeing long-term strength, while others remain cautious due to market volatility and potential policy shifts. Investors should weigh these insights along with their own risk tolerance and long-term goals.
Earning Report Summary
Exxon Mobil’s latest earnings report shows the company is still a powerhouse in the energy sector, despite market fluctuations. It brought in $34 billion in earnings for 2024, making it one of its best-performing years in the past decade. On top of that, cash flow from operations hit $55 billion, showing just how strong Exxon’s ability to generate cash remains.
When it comes to production, the numbers were impressive. Exxon produced 4.3 million barrels of oil equivalent per day for the full year. The Permian Basin and Guyana were major highlights, setting new records in output. The Permian, in particular, continues to be a major growth driver, with production expected to climb from 1.5 million barrels per day in 2024 to 2.3 million barrels per day by 2030. These production gains reflect years of strategic investment and efficiency improvements in key oil-rich regions.
On the sales side, high-value product sales were up 10 percent compared to last year, marking a new record. This boost comes as Exxon refines its product mix, focusing on the most profitable areas while shedding lower-margin assets.
Investors also had plenty to smile about, as the company returned $36 billion to shareholders through dividends and share buybacks. Exxon has long been committed to rewarding shareholders, and this past year was no exception.
Another area where Exxon made big moves was in low-carbon solutions. The company secured agreements to transport and store 6.7 million tons of carbon dioxide per year, more than any other player in the industry. Plus, it’s ramping up efforts in hydrogen and lithium, aiming for a $100 billion total market opportunity by 2030. While oil and gas remain the core business, Exxon is positioning itself for the future with strategic investments in cleaner energy alternatives.
Looking ahead, Exxon plans to spend between $27 billion and $29 billion on capital investments in 2025, with plans to increase that range to $28 billion to $33 billion between 2026 and 2030. This level of investment shows the company is focused on long-term growth, ensuring it remains a dominant force in the energy market for years to come.
Overall, the earnings report paints a picture of a company that continues to thrive, delivering strong financial performance while also preparing for the future. Whether it’s through record production, shareholder returns, or its push into lower-carbon initiatives, Exxon is proving it still has plenty of fuel left in the tank.
Financial Health and Stability
Exxon’s strong financial position helps it maintain its dividend payments even during downturns. It carries a manageable debt load and has plenty of liquidity to keep operations running smoothly.
- Cash on Hand: $23.03 billion, providing flexibility in case of unexpected challenges.
- Debt Load: $48.31 billion, with a low debt-to-equity ratio of 17.85%.
- Current Ratio: 1.31, which shows that Exxon can comfortably handle short-term obligations.
- Operating Cash Flow: $55 billion, which is more than enough to cover dividends and reinvestment needs.
A strong balance sheet is critical in the oil and gas sector, where price swings can be extreme. Exxon’s financial discipline ensures that it isn’t overleveraged, which reduces risk for long-term shareholders.
Valuation and Stock Performance
With the stock currently trading at $109.02, Exxon is sitting in a fair valuation range.
- Price-to-Earnings (P/E): 13.91, which is lower than the overall market, suggesting reasonable value.
- Price-to-Book (P/B): 1.79, which is within a normal range for a capital-intensive business.
- Price-to-Sales (P/S): 1.38, which aligns with past valuation trends.
The stock has traded between $103.67 and $126.34 over the past year, meaning it is closer to the lower end of its range. The 200-day moving average of $114.28 suggests that the stock has seen some weakness recently, but it remains a relatively stable play within the energy space.
With a beta of 0.80, Exxon is less volatile than some of its energy-sector peers. This lower volatility makes it more appealing for dividend investors looking for a steadier ride compared to smaller, more leveraged oil companies.
Risks and Considerations
Oil Price Volatility
Exxon’s profitability is still largely tied to oil prices. While its diversified operations help smooth out fluctuations, a prolonged drop in crude prices could impact earnings and slow dividend growth.
The Shift to Renewable Energy
The transition to cleaner energy sources poses a long-term challenge for traditional oil and gas companies. Exxon is making investments in carbon capture and lower-emission technologies, but the bulk of its business remains tied to fossil fuels. Regulatory and market shifts could create headwinds over time.
Geopolitical Risks
Exxon operates in multiple regions around the world, and geopolitical instability can impact supply chains and production. Sanctions, trade disputes, or conflicts in oil-producing regions could create earnings uncertainty.
Slower Dividend Growth
While Exxon has a strong history of raising dividends, the rate of increase has slowed. Investors should not expect rapid growth in payouts, but rather a steady and reliable stream of income.
Final Thoughts
For income-focused investors, Exxon remains one of the most dependable dividend stocks in the energy sector. The 3.63% yield, combined with a conservative payout ratio and decades of consistent payments, makes it a solid choice for those seeking passive income.
The company’s strong cash flow and disciplined financial management provide reassurance that dividends will continue to be a priority. While risks exist—especially related to energy prices and regulatory changes—Exxon’s long track record suggests it will adapt and remain a reliable income generator.
Investors looking for a mix of dividend stability and long-term exposure to the energy market will likely continue to find Exxon an appealing choice in their portfolios.
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