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ExxonMobil Stock Slumps: Dividend Yield Reaches 4.7%

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Jun. 19 2019, Published 2:32 p.m. ET

ExxonMobil’s dividend payment

ExxonMobil (XOM) stock has slumped 7.1% in the current quarter driven by weaker first-quarter earnings and lower oil prices. The fall in ExxonMobil stock has caused its dividend yield to surge. But before we examine the yield trend, let’s look at the company’s dividend payment in the current quarter.

ExxonMobil has consistently paid growing dividends for over three decades. In the second quarter, it paid $0.87 per share on June 10, 2019. It made this announcement on April 24, 2019. Its dividend payment in the second quarter represents a 13.0% rise over the dividend it paid in the second quarter of 2017.

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ExxonMobil’s dividend yield

ExxonMobil stock has fallen 7.9% in the past two years. The fall in its stock and the 13.0% rise in its dividend payment have led to a surge in its dividend yield to 4.7%. The stock’s dividend yield stood at 3.7% in the second quarter of 2017.

Further, ExxonMobil paid $3.5 billion in dividends in the first quarter. In its first-quarter earnings release, its chair and CEO, Darren W. Woods, said, “We are making strong progress on our growth plans and expect to deliver sustained value for our shareholders.”

ExxonMobil recognizes the fact that its dividend payments can increase steadily only if its earnings grow consistently. To increase its profits, ExxonMobil needs to invest in growth projects. Thus, ExxonMobil plans to incur capex efficiently to improve its future earnings and dividends.

Peers’ dividend yields

ExxonMobil’s dividend yield currently stands at 4.7%. Royal Dutch Shell (RDS.A), BP (BP), and Total (TOT) have yields of 5.9%, 6.0%, and 5.5%, respectively. However, Chevron (CVX) and Suncor Energy (SU) have relatively low yields of 3.9% and 4.0%, respectively.

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