If you are an income investor, then Exxon Mobil Corporation (NYSE:XOM) should be on your radar. Exxon Mobil Corporation explores for and produces crude oil and natural gas in the United States, Canada/Other Americas, Europe, Africa, Asia, and Australia/Oceania. Over the past 10 years, the US$311.99B market cap company has been growing its dividend payments, from $1.4 to $3.08. Currently yielding 4.19%, let’s take a closer look at Exxon Mobil’s dividend profile. View our latest analysis for Exxon Mobil
What Is A Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically: It is paying an annual yield above 75% of dividend payers It consistently pays out dividend without missing a payment or significantly cutting payout Its has increased its dividend per share amount over the past It can afford to pay the current rate of dividends from its earnings It has the ability to keep paying its dividends going forward
High Yield And Dependable
The company’s dividend yield stands at 4.19%, which is on the low-side for Oil and Gas stocks. But the real reason Exxon Mobil stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. XOM has increased its DPS from $1.4 to $3.08 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. The current trailing twelve-month payout ratio for the stock is 66.07%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 67.82%, leading to a dividend yield of around 4.47%. Moreover, EPS should increase to $4.7.
With Exxon Mobil producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a top dividend generator moving forward. However, given this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three essential factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for XOM’s future growth? Take a look at our free research report of analyst consensus for XOM’s outlook.
- Valuation: What is XOM worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether XOM is currently mispriced by the market.
- Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.