ExxonMobil Has a 4.7% Dividend Yield, Higher Valuation



ExxonMobil’s dividend yield

Whereas ExxonMobil’s (XOM) dividend yield is the fourth highest among the six integrated energy stocks we’re looking at, it has the largest market cap, of ~$314 billion. The company’s dividend yield has risen to 4.7% from 4.2% in Q2 2018 due to its dividends rising and its stock price falling.

ExxonMobil’s dividend is set to rise 6% year-over-year this quarter to $0.87 per share. Its stock has fallen 10% in the last year and 8% this quarter. Royal Dutch Shell’s (RDS.A), BP’s (BP), and Total’s (TOT) dividend yields are higher, at 6.0%, 5.9%, and 5.4%, respectively.

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ExxonMobil’s forward PE multiple is 16.1x, above peers’ average of 12.4x. Its forward EV[1.enterprise value]-to-EBITDA multiple of 6.9x is also above peers’ average of 5.4x. The company has strong financials and a large upstream portfolio.

In Q1 2019, ExxonMobil solidified its upstream portfolio and strengthened its key positions in offshore Guyana and the Permian Basin, advancing on its long-term growth path. However, the company’s earnings fell and missed estimates.

Analysts expect ExxonMobil’s earnings to fall 17% this year, and BP’s to fall 8%. However, they expect Shell’s and Total’s earnings to rise 10% and 7%, respectively. Among peers, ExxonMobil has a lower dividend yield, higher valuation, and larger expected earnings decline.


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