|Bid||74.95 x 3200|
|Ask||74.99 x 1000|
|Day's Range||74.54 - 75.25|
|52 Week Range||64.65 - 87.36|
|Beta (3Y Monthly)||1.15|
|PE Ratio (TTM)||17.28|
|Earnings Date||Aug 2, 2019|
|Forward Dividend & Yield||3.48 (4.65%)|
|1y Target Est||83.86|
If there was one stock that I had to buy from the energy sector for capital gains, Exxon Mobil (NYSE:XOM) would surely not be in contention.Source: Shutterstock I would, however, consider Exxon Mobil stock if I were an income investor. The company's dividend payment has increased at a CAGR of 6.2% over the last 37 years.From a stock perspective, it is worth noting that Exxon Mobil stock has remained sideways to lower in the last 12 months. I believe that this trend can potentially sustain. Exxon Mobil stock is likely to underperform the broad energy sector.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Permian ConcernExxon Mobil is likely to focus on investments in the upstream segment between 2019 and 2025. To put things into perspective, the company plans upstream investment of $46 to $48 billion for 2019 and 2020. * 10 High-Flying, Overvalued Stocks in Danger of Crashing For the same period, the downstream investment is likely to be $9 billion. Investment in the chemicals business for the period will be $8 billion. Clearly, the revenue and EBITDA growth driver in the foreseeable future will be the upstream segment.Within the upstream segment, the company main focus is on the Permian asset. Exxon Mobil expects 2019-2025 growth to deliver incremental production of 2.5Moebd. Of the incremental production, 40% is expected to come from the Permian Basin.The company's resource base in the Permian is 10 billion barrels of oil equivalent. Exxon Mobil plans to increase Permian output to 1 million barrels of oil equivalent per day by 2024.While these numbers look rosy, there are concerns related to the Permian Basin, which might translate into higher than expected cost and lower than expected production.The concerns related to the Permian are well summarized in this Bloomberg article. According to the article -"The constraints are manifold: pipeline limits, reduced flow from wells drilled too close together, low natural gas prices and high land costs. But the most consequential is that shale-well production falls off at such a high rate -- as much as 70% in the first year -- that you need to keep spending cash on new wells just to maintain output."Among the concerns, the cash spending to maintain output is the biggest concern. According to J. David Hughes, an earth scientist: "Of the $54 billion spent on tight oil plays in 2018, 70% served to offset field declines and 30% to increase production."With Exxon Mobil having significant asset presence in the Permian, it might end up spending more than estimated to ramp-up and maintain production at higher levels. This will dent the free cash flow estimates from the Permian asset.While Exxon Mobil can still address the infrastructure bottlenecks at the Permian, cost escalation will be a key challenge.I am also concerned because the global economy has slowed down and oil price is likely to stay sideways to lower in the foreseeable future. Asset Sale and Shareholder Value CreationThe concern related to the Permian Basin is likely to keep Exxon stock sideways. However, there is little doubt that dividend will sustain in the coming years.Exxon is plannning an asset sale worth $15 billion between 2019 and 2021. This will allow XOM to allocate free cash flow from core operations towards sustaining current dividend payout of $3.48 per share.Between 2019 and 2025, Exxon Mobil expects to generate $190 billion in free cash flow. The target is to allocate $100 billion toward Exxon's dividend. I believe that the company will pursue a share repurchase strategy for incremental value creation in the coming years. However, a lot will depend on price of crude oil and the possible escalation in cost in the Permian Basin to maintain production. Bottom Line on XOM StockAll that said, I am not entirely bearish on Exxon Mobil stock. If you're an income investor, you should still consider allocating a portion of your portfolio to buying XOM shares … However, I am skeptical about potential upside in Exxon stock due to the headwinds related to the Permian Basin. In addition, if the economic slowdown worsens, oil prices may trend lower, compressing the company's EBITDA margin and cash flows.Besides the upstream segment, Exxon Mobil plans to trigger sales growth in the chemical segment through new performance products. The company delivered eight innovative products in the segment in 2018. With focus on innovation, the segment growth is likely to be steady. However, the upstream segment is likely to dictate the stock price trend.In conclusion, I would wait for production rampup results in the Permian Basin before any chasing meaningful exposure to XOM stock. At the same time, any sharp corrections due to economic factors would make for a prime buying opportunity in Exxon Mobil shares.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Tech Stocks That Are Still Worth Your Time (And Money) * 7 Marijuana Stocks With Critical Levels to Watch * 7 of the Best Smart-Beta ETFs to Target Right Now The post This Is the Reason I Won't Buy Exxon Mobil Stock appeared first on InvestorPlace.
As oil prices get volatile, it's imperative to know integrated energy stocks' outlook. Analysts’ mean price targets for Chevron (CVX), Royal Dutch Shell (RDS.A), ExxonMobil (XOM), BP (BP), Total (TOT), and Suncor Energy (SU) suggest that SU has the highest upside potential of 36%. TOT and RDS.A follow with 32% and 29% upside potential. This […]
Exxon Mobil (NYSE: XOM) stock is treading water. After rallying from roughly $69 in January up to over $83 in April, shares in the oil and gas giant have dipped below the $75 level.Source: Shutterstock While offering a solid dividend yield, a lack of catalysts means the XOM stock price will likely stay within the $70 to $80 trading range. Read on to see why Exxon Mobil stock continues to be a hold. Downstream Business Facing ChallengesFor the first quarter of 2019, the big oil firm saw quarterly earnings fall from $6 billion to $2.35 billion. Downstream (refining) was the biggest cause of the earnings decline.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOne-time events such as asset sales in Q4 can explain some of the downstream earnings decline. But the lion's share was due to lower refining margins. The downstream segment went from a $2.7 billion profit in Q4 2018 to a $256 million loss in Q1 2019. * 7 Stocks Top Investors Are Buying Now Scheduled maintenance was another factor in the downstream unit's weak performance. Moreover, the company expects to spend similar amounts on maintenance in Q2. Upstream Offers Stability in XOM StockWhile the downstream business faces headwinds, upstream provides some positives for the XOM stock price. The company continues to increase production in the Permian Basin. Exxon Mobil's exploration off the coast of Guyana has also yielded strong production opportunities.In their June 2019 JP Morgan Energy Conference presentation, Guyana and other projects provide a high internal rate of return with a low breakeven rate. The company's expertise in developing new production partially outweighs the cyclicality of the downstream refining business.The relative strength of the exploration and production segment has blunted refining challenges. But additional weakness across Exxon Mobil's other business lines could hurt Q2 results. Q2 Earnings OutlookExxon Mobil is scheduled to release Q2 earnings in early August. While the company expects improved refining margins, this may not be enough to counter additional issues. Analysts project the oil firm's natural gas and chemical businesses to lower operating earnings.A decline in natural gas prices offsets an estimated $400 million to $600 million boost to Exxon Mobil's profitability from increased crude oil prices. Low margins and continued maintenance negatively impact the chemical unit.While earnings growth does not appear to be in the cards, there is a positive takeaway: Exxon Mobil stock continues to pay out a solid dividend, providing income-oriented investors a strong reason to consider a position. XOM Remains a Dividend AristocratExxon Mobil stock has seen annual dividend increases for 37 consecutive years. The five-year average growth rate of the dividend is 5.6%. With a current dividend yield of 4.6%, XOM stock is a solid opportunity for passive-income investors.The XOM stock price receives strong price support from the dividend. This somewhat coerces Exxon Mobil to continue the payouts to keep shareholders happy.Without a long-time rise in oil prices, it may be tough for XOM to continue growing the dividend. However, thanks to continued global demand for oil, the company may have the long-term earnings growth necessary to sustain approximately six annual dividend increases.But can investors count on the dividend yield alone to deliver value? Is the current valuation sustainable, or could the XOM stock price see additional declines? Let's see how Exxon Mobil compares to its peers: Exxon Mobil Stock Overvalued Relative to PeersAt the current XOM stock price, the company trades for 20.2-times forward earnings, and an enterprise value (EV)/EBITDA ratio of 9.7. This valuation appears stretched relative to the company's integrated oil and gas rivals:BP (NYSE: BP): 13-times trailing earnings, EV/EBITDA of 6Chevron (NYSE: CVX): 16.9-times forward earnings, EV/EBITDA of 8ConocoPhillips (NYSE: COP): 12.4-times forward earnings, EV/EBITDA of 4.8Royal Dutch Shell (NYSE: RDS.A): 11-times earnings, EV/EBITDA of 5.9One may think that the XOM stock premium is the result of a high dividend. But Exxon Mobil stock does not have the highest yield: For instance, BP has a 6.26% yield, while Royal Dutch Shell sports a 5.94% yield. And Chevron and ConocoPhillips aren't too far behind at 3.83% and 2.04%, respectively.Therefore, looking at both earnings power and dividend yield, it is crystal clear Exxon Mobil stock is not an outstanding opportunity for value or dividend investors. Bottom Line: Exxon Mobil Stock Is a HoldExxon Mobil stock has been hammered by weak refining margins. Despite these risks, XOM stock trades at a premium to its fellow integrated oil and gas companies.The company continues to be a dividend aristocrat, raising the payout for the 37th consecutive year. The dividend yield is solid, but not as high as those paid by BP and Royal Dutch Shell.With improved refining margins, Q2 earnings (anticipated for early August) could satisfy investors. However, weakness in natural gas and chemicals could outweigh a rebound in refining margins.With upside questionable but downside protected by the dividend play, XOM stock is a hold. Investors should consider entering a position if the company starts trading at a discount to its peers.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Tech Stocks That Are Still Worth Your Time (And Money) * 7 Marijuana Stocks With Critical Levels to Watch * 7 of the Best Smart-Beta ETFs to Target Right Now The post Stable Dividend, Minimal Growth Makes Exxon Mobil Stock a Hold appeared first on InvestorPlace.
RBC Capital Markets analyst Biraj Borkhataria worries that the company’s results will be hurt by weaker earnings in areas such as chemicals and refining.
Production shut-in and loss of imports forced by Hurricane Barry led to the stockpile draw with the world's biggest oil consumer even as lower refinery crude runs capped the decline.
Australia's No 2 independent gas producer Santos Ltd said on Thursday it had clocked record gas production in the second quarter on stronger output across its Western Australia gas assets. Santos now expects annual sales of 90-97 mmboe and production of 73-77 mmboe. Santos also realized lower prices over the quarter.
From a capital appreciation standpoint, Exxon Mobil (NYSE:XOM) stock has been a disappointment. Over the last decade, the XOM stock price has gained 12.5%. During that period, Exxon Mobil stock has badly lagged the S&P 500, which has returned a sizzling 223%.Source: Shutterstock But for investors focused on income, XOM actually hasn't been a terrible play. Exxon Mobil's dividends have more than doubled from a total of $1.66 per share in 2009 to what should be $3.48 in 2019. Investors' total return from Exxon Mobil stock has averaged 4.3% per year. * 8 Penny Stocks That Have Fallen From Grace That's still disappointing, since the S&P 500 has returned almost 15% annually, including dividends. But it's not terrible in an environment in which U.S. Treasuries have yielded less than 3% most of the time.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWe're still in that environment, with the 10-year Treasury yielding just 2.1%.It's true that buying a stock just for its yield can be very dangerous, as previous income darlings like General Electric (NYSE:GE), Kraft Heinz (NASDAQ:KHC), and Anheuser-Busch InBev (NYSE:BUD) all have cut their dividends recently.But Exxon Mobil doesn't have the debt problem those companies did (and still do) have. And while XOM stock has exposure to crude oil prices, it also uses a hedge to protect its profits. As a result, XOM stock price probably won't fall below $70 for long. And that makes XOM stock, currently at $75.50, an interesting play for income-focused investors in general and value-oriented, income-focused investors in particular. Why $70 Is a Key Level for XOM Stock PriceXOM hiked its quarterly dividend to $0.87 in May. That, in turn, suggests that investors are receiving $3.48 per share of XOM stock annually. And so, if the XOM stock price reaches $69.60, the stock would offer a yield of exactly 5%.It's difficult to see Exxon Mobil stock consistently yielding more than 5% for a few reasons. First, that type of yield is noticeable and usually not offered by relatively safe stocks. Of the Dow Jones Industrial Average stocks, only Dow (NYSE:DOW) and IBM (NYSE:IBM) offer higher yields. Both companies have real challenges (Dow is facing cyclical pressure and IBM has long-running growth problems).In the S&P 500, there are 35 components with higher yields. All have warts, among them AT&T (NYSE:T) and its debt load and Altria (NYSE:MO) which is facing concerns about long-term demand for its products.The second reason is that, historically, XOM stock has hardly ever yielded 5%. Its yield peaked at 5.5% during the 1987 market crash and touched 5% a few times through the early 1990s.But that was a very dark time in the crude oil markets, which had crashed after their early 1980s boom. Meanwhile, interest rates were much, much higher; investors could get 7% to 9% yields from10-year Treasuries.Without that alternative, a 5% yield from XOM stock is going to look very attractive. Indeed, in late May, as XOM and other oil stocks sold off, XOM stock bottomed just above $70. A bounce in crude prices helped, but it's likely that at least some investors saw the yield nearing 5% and pounced. Exxon Mobil Stock Is Safer Than It AppearsOf course, the question is whether Exxon Mobil stock really is safe. A 5% yield - or even a 4% yield - is attractive in this market. But what happens when crude prices plunge?The answer is that XOM's earnings will decline, but in a mostly manageable fashion. As I've written before, Exxon Mobil's "downstream'" operations - notably in refining - and its chemicals business provide an internal hedge. That's why XOM stock actually is a poor play on oil prices. But it's also why XOM stock didn't fall that far when the shale bust hit in 2016 - and why the company was relatively unscathed during the fourth quarter of 2018, which was disastrous for many oil and gas companies.If oil prices rise, XOM's upstream business will thrive and its downstream business will take a hit. When oil prices fall, the reverse is (usually) true. Despite this hedge, the XOM stock price is boosted by higher crude prices, as seen in 2014 when XOM stock hit an all-time high. But even amid a plunge in prices two years later, Exxon Mobil's dividend continued to rise,.XOM stock isn't risk-free. But Exxon's earnings easily cover the current dividend of XOM stock. The odds of XOM executing a GE-style dividend cut are slim, even with crude and natural gas prices relatively low. And this is an environment where, as I noted just last week, investors usually have to stretch for yield. If XOM is yielding 5% and 10-year Treasuries have a 2.1% yield, many investors are going to buy XOM stock. The TradeFor income investors, then, XOM looks reasonably attractive at $75.50. Its valuation is reasonable, at 14.4 times analysts' average forward earnings estimate. And XOM still looks poised to deliver further growth, as its CEO, Darren Wood, last year set a target of doubling the company's earnings by 2025.For traders, there's an intriguing option trade to be made as well. A bull put spread at $70 (selling the $70 put and buying a lower-priced put for protection) can offer double-digit returns or better, depending on the expiration date. That's essentially a bet that the XOM stock price won't be under $70 at expiration, which seems a nice bet to make at the moment.But there are some risks facing XOM stock at the moment. The U.S. presidential election could pressure XOM stock if a "green" Democrat was to win or even starts to gain momentum. A plunge in oil prices is another risk: Exxon Mobil does have hedges, but XOM stock still fell when crude collapsed in 2016.But there's risk everywhere when the market is at all-time highs, particularly for income investors. Getting a 4%+ yield from Exxon Mobil stock is one of the better risk-reward options out there at the moment. And that's precisely the point: investors aren't going to let a yield above 4% last for long. XOM stock isn't going to be the biggest gainer in the market over the next six months or the next three years. But, at the right price, it's an attractive dividend play.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post Why $70 Looks Like a Floor for Exxon Stock appeared first on InvestorPlace.
Exxon Mobil (NYSE:XOM) Has been an energy stalwart for decades and Exxon stock has paid off pretty well, but the company's continued success increasingly looks unlikely.Source: Shutterstock Almost 40 years ago I was convinced to leave Houston by an economist who had modeled how the local economy might do with rising, stable, or falling oil prices. In all three scenarios, Houston went into recession.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe early 1980s were indeed tough on Houston, but it came back stronger than ever. Houston today has about 2.3 million people. When I left in 1981 there were about 1.6 million. Houston is still an oil town like Detroit is a car town. For years its center was the Exxon Building, built in 1963. Early in this decade the company moved to Irving, near Dallas the smell of oil, or an oil refinery, still smells like money to me.The question is, for how long? * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip Falling Demand and Exxon StockDemand growth for oil is slowing. The International Energy Agency (IEA) keeps cutting its demand forecast. It now predicts a huge glut in 2020. Exxon, which dominates the U.S. shale oil market, gets a lot of the blame. There's an assumption built into the IEA forecast, however, that shale will play out and demand will return.Maybe they're wrong. Electric cars are now displacing hundreds of thousands of barrels of demand each day. China is preparing for a boom in electric cars and is building charging infrastructure to meet demand. Buyers will have dozens of models to choose from next year.Electricity demand is rising around the world but so is renewable energy production. That's not counting the cheapest form of renewable energy, efficiency. LEDs take less energy to run than fluorescent bulbs. Putting intelligence into factories, stores and homes reduces demand. Exxon Stock and EfficienciesEfficiency has also hit the oil patch.That's why Exxon Mobil has remained profitable as prices have averaged $60 per barrel in the last half of this decade. Low oil prices have made Exxon stock a "dividend aristocrat," its 87 cents per share dividend now yielding nearly 4.5%, backed by earnings of $4.88 per share last year.Exxon hopes to drop the price of producing shale oil in its Permian Basin operations to as low as $15 per barrel. That may be below even Saudi Arabia's costs. While the IEA still sees demand increasing about 1 million barrels per day in the future, Exxon is becoming the dominant player in a very slow-growth market.What's keeping oil prices up right now are international tensions. A war with Iran, which could block the Strait of Hormuz through which Saudi oil flows, might result in a hybrid war against tankers, pipelines, and other infrastructure. In this case, Exxon's U.S. supplies will get top dollar from global buyers.But what if peace breaks out? What happens when the war ends? Fundamentals will re-assert themselves. Between 1980 and 1986 oil prices fell by two-thirds, from a peak of $120 per barrel to an average of about $40. The Bottom Line on Exxon StockExxon Mobil's best hope for profit in the near term is a protracted struggle over oil supplies, a threat of war that will keep China and other importers paying top dollar.But the long-term supply-demand equation is running against Exxon. These are the good old days.Exxon Mobil next reports earnings on Aug. 2, with 88 cents per share expected on revenue of $74.45 billion. That barely makes the dividend, even with cheap Texas crude and the prospect of still more from its recent Guyana finds.War might be good in the short term, but peace looks like a struggle for the Kings of the Oilpatch. The 1980s may be coming back and, this time, they may not leave. Don't believe me? Pick up some Exxon at about $77 per share and get back to me in five years.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post This Very Well May Be the Beginning of the End for Exxon Stock appeared first on InvestorPlace.
Jefferies has cut its target prices for integrated energy stocks ExxonMobil (XOM), Chevron (CVX), and Royal Dutch Shell (RDS.A).
European Union foreign ministers on Monday turned up the pressure on Turkey after approving an initial batch of sanctions against the country over its drilling for gas in waters where EU member Cyprus has exclusive economic rights.
The Zacks Analyst Blog Highlights: ConocoPhillips, Exxon Mobil, Royal Dutch Shell and Chevron
(Bloomberg) -- Exxon Mobil Corp.’s loss in a court case in Europe may translate into a gain for carbon prices in the continent’s emissions trading system.The European Union’s Court of Justice ruled that part of Exxon’s natural gas processing plant in Germany should be classified as an electricity generator, a decision that could result in a cut to its allocation of free pollution rights. Since 2013, utilities have to buy permits to pump out carbon dioxide while other industries get some or all of theirs for free.The June 20 ruling, if followed by EU governments, could mean about 3,000 factories that transfer heat or electricity to the public grid may no longer qualify for all of their allocated permits, according to analysts including Berenberg Bank’s Lawson Steele, who wrote a detailed report on the impact of the decision.“The unnerving aspect of this ruling is that this has been happening since 2013, so there’s a retrospective angle,” said Mark Lewis, global head of sustainability research at BNP Paribas SA’s asset management unit, who’s followed the market since it began. “It’s backfiring not just on Exxon, but on many companies receiving free allowances for power stations located at factories.”The ruling may drive up the cost of carbon, already trading at an 11-year high, depending on how nations react, said Bo Qin at BloombergNEF. And applying the ruling to previous years could have a significant impact, though the chance of that “appears to be very small,” said Trevor Sikorski, an Energy Aspects Ltd. analyst. Exxon said it was too soon to comment on the ruling.The European Commission wasn’t immediately available to comment on how the decision may change the way allowances are distributed.The EU’s Emissions Trading System hands out or auctions pollution permits for more than 12,000 facilities owned by utilities and industries, as well as airlines. The court’s decision, which could take months to put into action, may impact the 2020 allocation of allowances if the affected supply isn’t returned to the market, said Berenberg’s Steele.“Less free allocations equals more demand with no supply offset,” he said. There’s a chance that EU nations direct the wrongly allocated free allowances to other factories that request them rather than boost the size of auctions, he said.Carbon has jumped more than five-fold since May 2017, buoyed by EU regulations to reduce a surplus that had depressed prices for years. Reduced allocations of free allowances may mean more companies have to buy permits in the market.The court ruling stems from a case brought by Exxon, which was denied a request for additional permits on top of the 1.18 million tons of allowances it already received free for a gas plant in Germany, according to the ruling. A Berlin court now must determine whether the case can be closed or needs further discussion.The ruling's implication “is that not only Exxon, but also other companies have been receiving allowances for free that they should have been paying for,”' BNP's Lewis said. “I don’t see how a ruling by the court cannot lead to action to correct this mistake.”(Updates with comment in final three paragraphs.)To contact the author of this story: Mathew Carr in London at email@example.comTo contact the editor responsible for this story: Reed Landberg at firstname.lastname@example.org, Andrew ReiersonLars PaulssonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The value of McDermott's (MDR) latest FEED contract, which is expected within $1-$50 million, will be reflected in second-quarter 2019 backlog.
ExxonMobil (NYSE:XOM) stock has so far enjoyed a good 2019. Coming off the stock market selloff of last fall, Exxon stock has risen by about 15% since the first of the year.Source: Shutterstock However, the stock has remained on a long-term downtrend since oil prices peaked more than five years ago. Although oil trades much higher than its 2016 lows, sectors such as natural gas, refining, and chemicals continue to hold ExxonMobil down.Until more of its segments see better pricing, XOM stock will struggle to rally far beyond current levels.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Exxon Stock Keeps Moving SidewaysBy segments, I do not necessarily mean oil. Yes, XOM has experienced some disruption from Tropical Strom Barry in the Gulf of Mexico. The temporary shutdown in offshore drilling could have an impact on earnings and perhaps create a buying opportunity in the stock. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond However, that does not necessarily mean traders will want to take advantage. Admittedly, I liked Exxon when I covered it back in early January. It then traded at around $72 per share and had begun to recover from the stock slump that hit the market just before Christmas. Since that time, it has had ups and downs but now trades at $78 per share.Still, what concerns me most about XOM stock is the fact that it never recovered from the mid-decade slump in oil prices. In the spring of 2014, the XOM stock price had topped $100 per share. Granted, at that time, oil prices had often topped $100 per barrel. Since oil prices had fallen below $30 per barrel by 2016, one can understand the subsequent drop in ExxonMobil stock.However, oil prices have recovered to about $60 per barrel today. XOM stock remains at about the same high-$70s per share range where it traded in early 2016. In that same time, its closest peer, Chevron (NYSE:CVX) has risen by more than 50%. Chevron and Exxon StockXOM stock is clearly not a terrible investment. It remains a diversified business that can earn profits and increase dividends regardless of oil prices. The company generated just over $36 billion in free cash flow in 2018. Moreover, its 4.5% dividend yield and 36-year track record of payout hikes remain a testament to its stability.Furthermore, ExxonMobil leads the world in refining and polyethylene production. It also remains the leading natural gas producer in the country. With natural gas, Chevron lags much smaller players such as Chesapeake Energy (NYSE:CHK), Anadarko Petroleum (NYSE:APC), and Devon Energy (NYSE:DVN).However, except on dividend yield and production levels, it finds itself continuously outmatched by Chevron. Moreover, according to Barron's, ExxonMobil will have to spend 75% more to increase its oil-equivalent production. It also faces weak margins in refining and chemicals in addition to low natural gas prices.Furthermore, both Exxon stock and Chevron trade at about the same price-to-earnings (PE) ratio. ExxonMobil's PE ratio stands at about 17.9 compared with 17.3. Both will see shrinking profits this year.However, analysts forecast a 21.3% decline for XOM. They predict a drop of 4.4% for Chevron. Chevron also looks poised for higher growth when earnings begin to increase for both companies. Although holders of XOM stock may earn more dividend income, Chevron stock will probably benefit more from its comparatively higher growth. Final Thoughts on Exxon StockDespite a surge in recent months, underperformance continues to define XOM stock. ExxonMobil has risen this year. However, the equity remains in a long-term downtrend.Although a storm in the Gulf may have only temporary effects on drilling, XOM investors will probably have to worry about low price levels in segments such as natural gas and refining for a longer period. Moreover, its archrival Chevron continues to grow faster and outperform ExxonMobil on most financial metrics.At current levels, XOM can offer relative stability and a generous dividend payout, but little else.As of this writing, Will Healy is long CHK stock. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Despite Moving Higher, Exxon Stock Still Underperforms appeared first on InvestorPlace.
(Bloomberg) -- Barry weakened to a tropical depression but was set to cause more life-threatening floods through Monday on its march northward. Dangerous flash floods were likely across parts of central Louisiana into far southwest Mississippi on Monday morning.The storm was 80 miles west-southwest of Little Rock, Arkansas, with sustained winds of 25 miles per hour, the National Hurricane Center said in a bulletin at 5 a.m. New York time. Although little change in the strength of the storm was forecast in the next 48 hours, flash flood warnings were in place for parts of southeast Texas through much of Louisiana, Mississippi and Arkansas, as well as parts of the mid-Mississippi Valley.A couple of tornadoes were possible on Monday from the Mid-South toward the Lower Ohio Valley, according to the bulletin. The storm was expected to continue moving north at about nine miles per hour during Monday, before turning northeast by Tuesday. A heavy band of rain was affecting areas of central Louisiana into far southwest Mississippi, with as much as 10 inches of rain expected through the morning hours.With the storm now firmly ashore, some producers in the Gulf of Mexico are preparing, or have begun, to re-staff their offshore crude and natural gas platforms. Exxon Mobil Corp. said it was returning workers to its three platforms where non-essential staff were evacuated, with “minimal production impact.” BHP Group expects to return workers to its two shut assets by Monday, while Enbridge Inc. plans to return crew to an offshore natural gas platform. Their offshore and onshore facilities would have to be inspected before they can restart.Oil PlatformsChevron Corp. said it already began restarting six crude oil platforms that it shut. The U.S. Gulf of Mexico accounts for 16% of total U.S. crude oil production and less than 3% of natural gas production, according to the Energy Department. Royal Dutch Shell Plc said it was still monitoring the situation and its assets in Auger, Salsa and Enchilada remain shut-in with production in the Mars Corridor curtailed, according to a statement Sunday on its website.Barry caused nearly 73% of crude oil production in the gulf to shut -- from 70% the day before, the Bureau of Safety and Environmental Enforcement said in an update. About 62% of natural gas production was also halted.Muted Agriculture ImpactAs for agricultural products such as sugar, the storm’s effect was limited as earlier forecasts of very heavy rainfall did not materialize, said Herman Waguespack, research director of American Sugar Cane League in Louisiana.“In the sugar industry, we didn’t get the rain that was forecast.” he said.“This storm is not going to be a major event for us.”U.S. Coast Guard has re-opened the Port of New Orleans in Louisiana to marine traffic but with some restrictions. Barry, which was briefly a Category 1 hurricane as it hit the Louisiana coast, had caused the Lower Mississippi River in New Orleans to shut Friday.Port of Fourchon, also in Louisiana, said it was assessing damage and clearing debris and power lines. Some roadways are now clear. This port serves more than 90% of the region’s deepwater oil production and acts as a land base for Louisiana Offshore Oil Port (LOOP). It had declared mandatory evacuations on Friday.Louisiana’s oil refineries, which account for about 18% of total U.S. operable refining capacity, were largely spared.RefineriesPhillips 66 said its Alliance refinery was being prepared for restart Monday, after shutting it Friday. PBF Energy Inc.’s Chalmette refinery reduced production rates slightly because Barry halted new deliveries of crude, according to people familiar with operations. Exxon Mobil said its refinery and chemical plant in Baton Rouge and a storage terminal in Sorrento, La., respectively were operating normally.Entergy Louisiana LLC, the main provider in the state with a total of 1.08 million customers, reported that 25,000 remained affected. About 23,000 out of Cleco Corp.’s nearly 285,000 customers were without power.The storm storm will cause about $800 million to $900 million in damage, Chuck Watson, a disaster modeler with Enki Research in Savannah, Georgia, said on Friday.(Updates with latest weather bulletin, number of homes affected.)\--With assistance from Ann Koh, Serene Cheong, Bill Lehane and Fred Pals.To contact the reporter on this story: Sheela Tobben in New York at email@example.comTo contact the editors responsible for this story: David Marino at firstname.lastname@example.org, James Ludden, John DeaneFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Income investors love high-yield stocks, but you need to be on the lookout for dividend cuts. Here are some clues that there's trouble brewing.
One impact of Hurricane Barry could be a sharp increase in gasoline prices in parts of the country, according to an energy and infrastructure portfolio manager. About half of U.S. refining capacity is near the Gulf of Mexico, with 18% in Louisiana alone. Many of those refineries could be impacted by Tropical Storm Barry, which was projected to drop more than 10 inches of rain on New Orleans and the surrounding region as of the Friday forecast.