|Day's Range||4.8000 - 4.8500|
It has been a glum time for ExxonMobil (NYSE:XOM) shareholders. Regardless of whether you're looking at the past one year, five years, or ten years, XOM stock has been stuck in the mud. You'd have to go back to before the Great Financial Crisis since XOM stock made investors significant money.Source: Shutterstock As is often the case, however, the longer a stock trades sideways, the bigger its next move will be. XOM stock has now traded largely flat for a decade, swinging up and down but generally remaining near the $75/share mark. When it finally gets going again, expect a huge move. * 7 Reasons to Buy Canopy Growth Stock Technically, Exxon stock is primed to explode upward once it starts accelerating. Here's why Exxon's next move will be upward, and probably dramatically so.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Exxon Mobil's Huge Growth PlansInvestors tend to think of the oil and gas companies being hunkered down for a long winter, and that's generally right. As the oil slump has entered year five, many smaller firms are drastically cutting down exploration and drilling expenses. In a world of $55/barrel oil, it doesn't make sense for small operators to try to increase production.This leaves a big opportunity for companies with more scale and cheaper access to capital like Exxon Mobil. The company can, and is, making efforts to greatly improve its production in coming years. Management realizes that the world is going to need more oil. Once the current shale boom loses steam in the U.S., we'll need another round of fresh supply to replace declining reserves elsewhere.Enter Exxon, with its multi-billion dollar projects to open new production fields in places like Guyana. In fact, Exxon is getting aggressive. They are aiming to double cash flow and earnings in coming years. With so many other players pulling back their spending, Exxon with its fortress balance sheet will profitably pick up the slack. Oil May Be Peaking, But It Isn't Going Away Anytime SoonMany folks seem to confuse Exxon's (very) long-term prospects with its ability to carry on in coming years. Some analysts project that if current trends hold, by around 2050, we may see renewable energy displace fossil fuels in making up a large portion of the electric grid. And the crossover point for electric vehicles could be relatively sooner -- say in the 2030s. Exxon is well aware of this, and management has invested heavily in research for next-generation energy solutions.The fact that renewables will be growing in future decades hardly matters to XOM stock tomorrow, or even ten years from now. By 2040, the 2019 Energy Outlook estimates (see slides 11 and 13) that wind, nuclear, solar, and other renewables will still be less than one-fifth of the world's global energy supply. Even dirty coal will remain a key though shrinking player, while oil demand will be about flat, and natural gas use will continue to rise. XOM Stock Dividend Is Rock-SolidXOM stock is currently offering a more than 5% dividend yield. This is the highest dividend that the company has provided in three decades. Even in the Great Financial Crisis, XOM stock paid far less. Also, in the late 1990s, when oil was just $15/barrel, XOM stock only paid a 2-2.5% dividend. Now it pays double that.The higher dividend yield is the result of investor apathy, along with many socially-responsible funds dumping their allocations to fossil fuels altogether. Oil and gas appear to be becoming like tobacco stocks in the 1990s, shunned by investors who felt the companies were "obsolete" and harmful morally. Regardless of those concerns, cigarette companies like Altria (NYSE:MO) went on to post world-beating returns while giving off fat dividend yields.Exxon stock could perform similarly going forward. The world will need plenty of oil for at least a few more decades, and Exxon has the balance sheet to keep its dividend secure. At an AA+ credit rating, Exxon is one of the highest-rated companies out there; it could pay off its debt with just a year or two of profits if needed.As for the dividend, based on an average of recent years, Exxon's cash flow covers its payout more than three times. This indicates that the company has more than enough ongoing operations, even at relatively low oil and gas prices, to pay the 5% dividend indefinitely. And with growth projects coming online, the company will be able to continue hiking the dividend even more in coming years. XOM Stock VerdictI've been buying Exxon stock gradually over the past year. And with the recent dip under $70/share, I've gotten more aggressive in picking up shares.Admittedly, there's no imminent catalyst for Exxon shares to take off. The oil market is currently in a slump, and natural gas is oversupplied as well. Exxon's refining business is steady, and is generating large profits. That said, until oil or natural gas -- preferably both -- see an uptick, XOM stock might stay down around $70. That's true of other high-quality oil and gas stocks like Chevron (NYSE:CVX), BP (NYSE:BP), and Canadian Natural Resources (NYSE:CNQ) as well.Once prices start to lift, however, XOM stock will skyrocket. Remember that the company is planning to double earnings and cash flow over the next five years from increasing production from low-cost new areas such as Guyana. This should lift earnings to $9/share.Throw in some help from higher oil and gas prices, and EPS will reach the double digits. At the current $70/share price, that'd be a 7x P/E ratio, or less. Even a $100 share price would be no more than 10x earnings. Add in that outsized dividend yield and things look even better. Buy now, and enjoy the 5% dividend with a strong chance of big share price appreciation over the next few years as well.At the time of this writing, Ian Bezek owned XOM, BP, and CNQ stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Reasons to Buy Canopy Growth Stock * 7 Restaurant Stocks to Leave on Your Plate * 4 Turnaround Plays to Buy Now The post Exxon Stock Offers Tremendous Value and a Great 5.1% Dividend Yield appeared first on InvestorPlace.
The recent announcement of a Brexit deal is a welcome development for some, but, not necessarily all. Let's thus take a look at the winners and losers.
Oceangoing freight ships will use cleaner fuel at the start of next year, leading to higher shipping costs that may force consumers to pay more for goods and to heat their homes.
Despite its No. 1 spot on the Houston Business Journal's 2019 Largest Houston-Area Energy Employers List, Irving, Texas-based Exxon Mobil Corp. (NYSE: XOM) has seen a large drop off in global revenue since 2014. The company reported a global revenue of $279.33 billion in 2018, a 32 percent decrease since 2014, when it reported $421.11 billion in global revenue. The company’s lowest reported revenue was in 2016, when it reported $218.61 billion.
Brazil's Senate passed the main text of a bill late on Tuesday defining the distribution of proceeds from a blockbuster auction of oil prospecting rights, a key milestone for the enormous offshore region known as TOR - the 'transfer-of-rights' area. The bidders who win exploration and production rights in the massive Nov. 6 auction will be obliged to pay the government a combined signing bonus of some 106.5 billion reais ($25.8 billion), making it the largest oil bidding round in history, according to Brazilian authorities. The fields are unique as Brazilian state-run oil firm Petroleo Brasileiro SA, better known as Petrobras, has already done significant exploration work in the area.
ConocoPhillips (COP) entered into an agreement to sell some of its portfolio in Australia for $1.39 billion. Meanwhile, downstream major Phillips 66 (PSX) launched a $3 billion new buyback program.
India has ample growth and investment opportunity in the natural gas space. To augment the development, the government of India is going to invest $60B in natural gas infrastructure.
TOTAL (TOT) to gain from the buyout of a stake in Adani Gas, as the move coincides with the government of India's announcement of $60B investment to strengthen gas infrastructure across the nation.
Thus far in its $10 billion divestment program, BP's largest single deal is the $5.6 billion sale of its operations in Alaska to a Houston-based company.
On Friday BP said it will sell four packages of legacy gas assets from its US shale business, without disclosing the buyer or the price. In August, BP said it would sell its Alaskan business to Hilcorp for $5.6bn, ending its 60-year history in the US state.
BP will take charges of $2 to $3 billion in the third quarter, the British energy firm said on Friday, as it looks to reach divestments worth $10 billion by the end of 2019, a year ahead of schedule. In a statement, London-based BP said it expects to agree asset sales of $10 billion by end-year after its $5.6 billion sale of its Alaskan business to Hilcorp and divestments in U.S. shale gas. BP shares were down 1.1% by 0948 GMT compared with a 1.3% gain in the broader European energy index.
BP PLC on Friday said it plans on selling some $10 billion in assets by the end of 2019, a year earlier than it had expected. The major oil company had announced plans to offload assets last year to shrink its debt ratio. The company in a statement on Friday said it has been selling oil assets in Alaska at a faster clip than had been anticipated, with those divestitures expected to result in a non-cash after-tax charge of $2-3 billion in the company's 2019 full-year results. Shares of BP traded in London were down 0.7% on Friday at 5 pounds. U.S.-listed shares of BP were up 0.7% in premarket action at $37.41.
France's Total SA , the big winner in a Brazilian auction of offshore oil concessions on Thursday, said it will not participate in a bigger auction scheduled for Nov. 6 of the so-called Transfer of Rights area in Brazil's pre-salt region. The company's chief executive officer, Patrick Pouyanné, said in a statement that was because the competitive bidding rounds were for non-operating stakes. A consortium led by Total won the exploration and production rights for an offshore block near the pre-salt region on Thursday, agreeing to pay the government a signing bonus of 4 billion reais ($978 million).
Let's see if BP p.l.c. (BP) stock is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks.
Ten companies on Thursday agreed to pay more than $2 billion for the exploration and production rights in 12 offshore oil blocks in Brazil, in what could be a promising sign for even bigger upcoming oil auctions. The most heavily sought after areas in the Thursday auction directly border Brazil's so-called pre-salt area, a coveted zone in which billions of barrels of oil are trapped under a thick layer of salt beneath the ocean floor. The biggest move came from a France's Total SA, which, in a consortium with Malaysia's Petronas and Qatar Petroleum, dropped 4.029 billion reais for one block abutting the pre-salt area.
Hedge funds run by legendary names like George Soros and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the […]