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Will ExxonMobil (XOM) Restart Share Repurchase Program?

Zacks Equity Research
SunTrust (STI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Exxon Mobil Corporation’s XOM recent projection to boost earnings through 2025 could not please investors as the market was expecting the company to restart its stock repurchase program.  

While other energy majors are repurchasing shares with surplus cash, ExxonMobil is focusing on key projects with higher capital spending. Financial services firm, Raymond James & Associates, Inc., revealed that among all other major energy players, ExxonMobil is the only company that has not launched an active repurchase program in the last few quarters. Notably, stock buybacks by the largest publicly traded energy firm were the biggest among all the S&P 500 stocks a decade back, added the financial entity.

However, the good news is that ExxonMobil may restart the repurchase program by diverting part of the cash from its massive asset divestments through 2021 to buy back stocks, per Chairman and CEO Darren Woods’ words to CNBC. It is to be noted that recently ExxonMobil announced its expectation for $15-billion cash from divesting asset through 2021. Nevertheless, the timing for share buybacks is uncertain.

Although ExxonMobil’s share buyback story is quite disappointing, the integrated energy player’s dividend payment history is impressive. Over the past 35 years, ExxonMobil has raised its annual dividend at an average rate of 6.3%.

Currently, ExxonMobil carries a Zacks Rank #3 (Hold). Meanwhile, better-ranked players in the energy space include Antero Resources Corporation AR, Jones Energy Inc. JONE and SemGroup Corporation SEMG. Antero Resources sports a Zacks Rank #1 (Strong Buy) while Jones Energy and SemGroup carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Antero Resources’ earnings beat the Zacks Consensus Estimate in two straight quarters.

Jones Energy expects 2019 earnings growth of 19% year over year.

SemGroup has average positive surprise of 85.4% for the preceding four quarters.

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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
 
SemGroup Corporation (SEMG) : Free Stock Analysis Report
 
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