Assessing Exxon Mobil Corp's Dividend Sustainability and Growth
Exxon Mobil Corp (XOM, Financial) recently announced a dividend of $0.95 per share, payable on 2024-03-11, with the ex-dividend date set for 2024-02-13. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Exxon Mobil Corp's dividend performance and assess its sustainability.
What Does Exxon Mobil Corp Do?
Exxon Mobil Corp is an integrated oil and gas company that explores for, produces, and refines oil around the world. In 2022, it produced 2.4 million barrels of liquids and 8.3 billion cubic feet of natural gas per day. At the end of 2022, reserves were 17.7 billion barrels of oil equivalent, 65% of which were liquids. The company is the world's largest refiner with a total global refining capacity of 4.6 million barrels of oil per day and is one of the world's largest manufacturers of commodity and specialty chemicals.
A Glimpse at Exxon Mobil Corp's Dividend History
Exxon Mobil Corp has maintained a consistent dividend payment record since 1983, distributing dividends on a quarterly basis. As a dividend aristocrat, the company has increased its dividend each year for at least the past 41 years, showcasing a strong commitment to returning value to shareholders. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Exxon Mobil Corp's Dividend Yield and Growth
As of today, Exxon Mobil Corp currently has a 12-month trailing dividend yield of 3.62% and a 12-month forward dividend yield of 3.73%, indicating an expectation of increased dividend payments over the next 12 months.
Over the past three years, Exxon Mobil Corp's annual dividend growth rate was 1.90%. Looking at a five-year horizon, this rate increased to 2.20% per year. Over the past decade, the annual dividends per share growth rate stands at 3.80%. Based on Exxon Mobil Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Exxon Mobil Corp stock as of today is approximately 4.06%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2023-12-31, Exxon Mobil Corp's dividend payout ratio is 0.39, suggesting that the company retains a significant part of its earnings for future growth and unexpected downturns.
Exxon Mobil Corp's profitability rank, as of 2023-12-31, is 7 out of 10, indicating good profitability prospects. The company has reported net profit in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
Robust growth metrics are essential for the sustainability of dividends. Exxon Mobil Corp's growth rank of 7 out of 10 suggests a good growth trajectory compared to its competitors.
Revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model for Exxon Mobil Corp. The company's revenue has increased by approximately 25.50% per year on average, outperforming approximately 76.32% of global competitors.
Next Steps for Investors
In conclusion, Exxon Mobil Corp's consistent dividend payments, growth rate, reasonable payout ratio, solid profitability, and robust growth metrics present a compelling case for value investors. The company's commitment to shareholder returns, combined with its financial health and market position, suggests that its dividend is sustainable in the foreseeable future. Investors interested in high-dividend yield stocks may find Exxon Mobil Corp an attractive option to consider for their portfolios.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
