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  • Exxon Mobil Will Keep Paying Its Dividend, And May Be Worth 30% More

    Exxon Mobil Corp. (NYSE:XOM) is not going to lower its dividend no matter what it costs the company. That point came out loud and clear from the company’s latest earnings conference call. This means that XOM stock will continue to have a “strong” dividend yield of about 6.15%. It’s worth at least 32% more, or $74.63 per share, based on its historical dividend yield. Source: Harry Green / Shutterstock.com For the past two years (8 quarters) Exxon has paid 87 cents per share in quarterly dividends. That works out to $3.48 per share each year. Exxon clearly intends to maintain that dividend. Therefore, at today’s price (April 9) of $55.87, the dividend yield is very healthy at 6.2%. Target Price Based on Historicals Moreover, based on the company’s historical dividend yield, this is much higher than its average. For example, Morningstar reports that over the past 5 years, its trailing 5-year dividend yield has been 4.96% (almost 5%).InvestorPlace - Stock Market News, Stock Advice & Trading Tips We can use this to estimate the normalized target value for XOM stock. For example, if we divide the dividend per share of $3.48 by the average yield of 4.96%, the result is a target price of $70.16 per share. This represents a potential gain of $14.29 or about 26% more based on today’s price of $55.87. 7 Infrastructure Stocks Excited For The $2 Trillion Biden Plan We can do the same thing with the company’s earnings-per-share (EPS). Applying Morningstar’s 5-year avg. price-to-earnings (P/E) ratio of 25.62 times (over the last 5 years) to Exxon’s EPS for this year ($2.87) produces a target price of $73.53. That is over 30% above today’s price. Similarly using the Morningstar forward P/E average of 21.75 times Exxon’s $3.88 EPS for 2022 produces a target price of $84.39. Now we have three different price targets based on dividend yield and price-to-earnings. To round things out we can also derive a price based on its historical price-to-sales. Morningstar says this is 1.25 times over the last five years. Analysts predict sales of $245.5 billion for 2021, so the price target works out to $306.875 billion. This is 29.7% above Exxon’s existing market cap of $236.5 billion. In other words, XOM stock is worth nearly 30% more or $72.46 per share. That means that, on average, XOM stock is worth about 34% higher, or $75.14 per share. These ratios are based on earnings and sales estimates provided by Seeking Alpha on their Earnings tab for Exxon Mobil stock. The estimates can vary depending on which aggregation service is used. But this gives you an idea that XOM stock is undervalued based on its historical metrics. One thing to note is that although the $3.48 dividend exceeds the forecast earnings of $2.87 this year (2021). But next year analysts predict EPS of $3.88 per share, which will cover the dividend, assuming oil and gas prices stay high. Moreover, management said on the fourth-quarter 2020 conference call that cash flow from operations should cover the dividend payments this year. This coincides with their intention to maintain a “strong” dividend, mentioned 10 times on the conference call. What To Do With XOM Stock Most analysts have higher price targets for Exxon stock, but not by much. For example, TipRanks.com says that 18 analysts have an average price target of just $60.68. Similarly, Yahoo! Finance says that 25 analysts believe on average XOM stock is worth $61.18. However, Marketbeat.com reports that 24 analysts have a lower target of $52.73, whereas Seeking Alpha says that 27 analysts have an average target of $61.36. Click to EnlargeSource: Mark R. Hake, CFA You can see in the table on the right that the median analyst price target is $60.63, or 7.1% above today’s price. So, on the one hand, this is much lower than my price target using historical metrics. But on the other hand, keep in mind that my price target could take several years to achieve, whereas most analysts are just looking out one year. For example, if my 34% higher price target takes two years, the average annual return will be just 16% each year on a compounded basis. Moreover, the dividend yield is 6.15%. Therefore the total return, even if the analysts’ target price pans out will be 13.25% (i.e., 7.1% price gain plus 6.15% dividend yield). My target price produces an expected return of 21.95% (i.e., 14.8% gain plus 6.15% yield). Any way that you look at it, XOM stock looks like a good bargain here, assuming oil stays high and the stock returns to its normal historical value metrics. On the date of publication, Mark R. Hake did not hold a long or short position in any of the securities in this article. Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner Stock Prodigy Who Found NIO at $2… Says Buy THIS Now The post Exxon Mobil Will Keep Paying Its Dividend, And May Be Worth 30% More appeared first on InvestorPlace.

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  • Bitcoin above $60,000 again on talk of reduced supply

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  • Whether you’re retiring in 30 years or 5 years, you still need to do this one thing religiously

    Investing is a crucial part of accumulating enough money in retirement — and the best results come with proper asset allocation. Retirement tip of the week: Check the asset allocation of your retirement portfolios, and if you’ve done it recently, make it a regularly scheduled task once a year. “The time to review your asset allocation and overall retirement investment strategy should be a proactive process throughout the year,” said Jon Ulin, chief executive officer of Ulin & Co. Wealth Management.

  • Arm Battle With China CEO Escalates, Complicating SoftBank Sale

    (Bloomberg) -- The battle for control of Arm Ltd.’s China business is escalating with new lawsuits aimed at keeping the unit’s controversial chief executive in power, further complicating SoftBank Group Corp.’s efforts to sell the business to Nvidia Corp.The dispute erupted almost a year ago in June after the board voted to oust Arm China Chief Executive Officer Allen Wu for conflicts of interest, but he refused to leave. Now the Chinese unit, which remains under Wu’s control, has filed lawsuits against three senior executives the board designated to replace him, according to people familiar with the matter. The previously unreported suits could take years to resolve, suggesting Wu may remain entrenched.Wu fired the three men -- including co-CEO Phil Tang -- but they were subsequently reinstated by the board. In the new lawsuits, Arm China is suing the trio, demanding they return company property, according to the people.Arm China declined to comment on any ongoing legal cases or possible settlement talks. It did say the three executives had caused “material damages” to the company and they had been terminated for legitimate reasons.Tang didn’t return requests for comment. Arm Ltd. declined to elaborate, saying it won’t comment on pending legal matters.The complex tussle has thrown into question the future of Arm, whose semiconductor technology is the world’s most widely used for smartphones and is increasingly deployed in computers. SoftBank founder Masayoshi Son agreed to sell the British chip designer to Nvidia for $40 billion last year, but the path for completing that transaction is growing increasingly difficult.The China dispute also raises questions about Beijing’s willingness to protect foreign investment in the world’s second-largest economy. Arm Ltd. sold a majority stake in the China unit to a consortium of investors, including Beijing-backed institutions. That has complicated the British firm’s efforts to manage Arm China and Wu, who has support from local authorities in Shenzhen.Both sides appear to be at a stalemate. Wu, a Chinese-born U.S. citizen, pulled back from signing settlement agreements worth tens of millions of dollars if he would leave the company, the people said, asking not to be identified talking about legal matters. At the same time, two minority shareholders in Arm China linked to Wu have filed lawsuits to overturn his June 4 dismissal, they said.SoftBank opened negotiations with him last year and had hoped to reach some sort of resolution, they said. Instead the court battles are deepening and the Japanese company has soured over the increasingly complicated dispute, the people said. SoftBank is now resigned to letting the legal proceedings take their course and there are no current negotiations with Wu, according to one of the people.“We are going through a leadership change in China; it’s taking time to resolve,” said Arm Ltd.’s Chief Executive Officer Simon Segars in an interview with Bloomberg Television recently. “It’s hard. But we are confident that’s going to get resolved.”SoftBank and Nvidia declined to comment on the dispute in China.Arm China said in a statement that Wu’s position “is compliant with legal registration and confirmed by China law and regulations.”Read more: Arm Takes Aim at Intel Chips in Biggest Tech Overhaul in DecadeThe standoff accords a relatively unknown executive outsized influence over one of the industry’s most important pieces of technology, in the world’s biggest internet and semiconductor market. Chinese companies need unfettered access to Arm’s products to push forward with the country’s attempts to make itself more independent in chip technology, an area where it’s largely reliant on imports. Beyond resolving the stalemate, Nvidia and SoftBank also need Beijing’s signoff to seal their deal, and it’s unclear whether Wu’s presence would complicate that.Wu’s hold on Arm China is partially due to local laws which make it difficult to change control of a company unless you’re physically in control of the company stamp and registration documents. He’s refused to give them up and has used company funds to pay for legal fees incurred in his attempt to fight off his dismissal, the people said.Arm China said payment of legal fees “is made in compliance with company policies as well as China laws and regulations.”His ultimate goals appear to be a large cash payoff and immunity from subsequent legal action, according to people who’ve spoken with him. Inside Arm China, which is responsible for selling licenses to its chip designs and fundamental technology in the country, Wu has told local staff he’s not going anywhere. He recently gave employees Chinese New Year cash presents in a red envelope with his surname on it.Arm China said the money came from Wu personally to show his appreciation to colleagues, a tradition at Chinese New Year in the country.Hearings in the case against the three executives are expected to take place in late May, one of the people said. Separately, two minority shareholders in Arm China have sued the Chinese entity in Shenzhen to nullify the board’s decision to oust Wu. These two cases are now being merged and hearings are slated for late April, the people said.Son told investors as recently as February that he expects to close the Arm sale and “I don’t have any Plan B.”Arm, for its part is trying to make sure that its technology remains pervasive in China despite U.S. sanctions intended to curb the supply of American technology to major companies like Huawei Technologies Co. While Arm is a U.K.-based company part of its operations are in the U.S. making its products subject to controls.The Chinese government has not stated its position on the Arm China leadership struggle, but the unit has several government-backed shareholders including sovereign wealth fund China Investment Corp. and the Silk Road Fund.In his interview with Bloomberg Television, Arm Ltd. CEO Segars said that the ten-month standoff hasn’t hurt Arm’s business in China. Lack of travel for face-to-face meetings during the pandemic has prolonged the process of changing leadership in China, he said.“When we announced the deal in September, we said it would take about 18 months,” he said. “We remain confident in that timeline.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Why Alibaba Just Got Hit With A Record $2.87 Billion Fine In China

    The regulatory troubles that have beset Jack Ma since November may be nearing their end, culminating in a hefty fine slapped on the Chinese tech entrepreneur's biggest brand. What Happened: China fined Ma's Alibaba Group Holding Ltd (NYSE: BABA) a record $2.8 billion after a monopoly probe found that the company had abused its dominant market position, Reuters reported. The regulator also ordered Alibaba to make "thorough rectifications" to strengthen internal compliance and protect consumer rights. The Chinese government said that Alibaba had used anti-competitive practices in its online retail market. According to state-run Xinhua news agency, the penalty came from the State Administration for Market Regulation, which had been investigating it since December. The size of the penalty was determined after regulators decided to fine Alibaba 4% of its 2019 sales of 455.7 billion yuan. The fine is more than double the $975 million fine that China issued to QUALCOMM, Inc. (NASDAQ: QCOM) in 2015 for anticompetitive practices. In a press statement, Alibaba said, "Alibaba accepts the penalty with sincerity and will ensure its compliance with determination." "To serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems and build on growth through innovation," the company added. Alibaba will hold a conference call on Monday to discuss the penalty. Why It Matters: The outspoken Ma has long been the most visible figure of China's economic rise and stands out in a culture where getting attention at high levels is perilous. Alibaba, in particular, has been under scrutiny since last October when Ma criticized China's banking sector as operating with a “pawnshop mentality." The government scuttled the planned blockbuster Ant Group IPO shortly after Ma made the comments. Chinese regulators are increasing their pressure on Ma and his powerhouse companies, Ant Group Co., Alibaba Group Holding Ltd. and Alibaba's media holdings. Last year, the People's Bank of China, the country's central bank, instructed Ant Group to "rectify" how it does business. Ma's Alibaba Group and other leading tech companies in China have been scrutinized by regulators over their growing influence in the country. Technology firms in China have been hiring legal experts and setting aside funds for potential fines amid the antitrust and data privacy crackdown by regulators. Photo courtesy: World Economic Forum via Wikimedia See more from BenzingaClick here for options trades from BenzingaWhy Authorities Are Putting The Brakes on Johnson & Johnson's Vaccine In Several States'Godzilla vs. Kong' Smashes Pandemic-Era Box Office With .5 Million Debut© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • He began buying Tesla at just $7.50, and now he’s retiring at 39 years old with $12 million worth — he still refuses to sell a single share

    While just about every financial planner out there continues to espouse the "diversify" mantra, Jason DeBolt, a former Google and current Amazon employee, has taken a decidedly different approach.

  • Novavax: All Eyes on Upcoming Phase 3 PREVENT-19 Study Readout

    Despite year-to-date gains of 61%, shares of Novavax (NVAX) have retreated by 44% since the yearly highs of early February. However, according to B. Riley analyst Mayank Mamtani, the stock is well-positioned to resume its upwards curve ahead of a potential near-term catalyst. Results from the Phase 3 PREVENT-19 study for Novavax’ Covid-19 vaccine candidate, NVX-CoV2373, are expected shortly, and positive data could pave the way for the company to submit an Emergency Use Approval (EUA) filing in Q2. This could result in “potential U.S. market entry in late 2Q/early 3Q.” Mamtani positive outlook for NVAX’ offering is based on the recently announced “overwhelmingly positive results” from two pivotal U.S. centric studies - AstraZeneca's AZD1222 in adult participants and PFE/BNTX's BNT162b2 in ages 12-15 years old. The latter showed 100% efficacy (0 vs 18) and “robust antibody responses,” which were better than those reported in an earlier study of vaccinated 16-25 years old participants. “While we await disclosure of specific details around nAb titers and reactogenicity,” said the 5-star analyst, “We view this generally as a positive read-through for NVAX as a robust antibody response seems to be translating in high VE rates similar to that observed in the young adult group.” Mamtani also thinks the halt to AZD1222’s vaccine trials in pediatrics, which came after the EMA (European Medicines Agency) released a cautionary statement around a potential causal link between AstraZeneca’s vaccine and rare blood clots (reported in a relatively younger adult patient group), was “taken out of an abundance of caution.” “The total case reports (n=22) of blood brain clots remain extremely low, with benefits continuing to outweigh risks,” Mamtani noted. The analyst believes Novavax is the “primary beneficiary of the mixed newsflow around AZD1222.” Consumer choice will become increasingly important as more vaccines hit the market and younger adult population groups become eligible to get vaccinated too. The effect could “drive mind and market share towards '2373 assuming best-in-class profile maintained in upcoming data releases and commercial availability within the projected mid-year timeframe.” To this end, Mamtani reiterated a Buy rating on NVAX and has a $365 price target for the shares. Investors could be pocketing gains of 107%, should Mamtani’s thesis play out accordingly. (To watch Mamtani’s track record, click here) Mamtani’s positive outlook is certainly no anomaly on the Street. All 4 other recent Novavax reviews have reached the same conclusion – Buy. The stock’s Strong Buy consensus rating is backed by a bullish average price target, as well; at $323, the 12-month upside potential comes in at ~80%. (See NVAX stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.