7 Expert Stock Picks for September

Recommended by: Richard Band, editor of Profitable Investing
Strategy: Long-term investing that safely outperforms the market

ExxonMobil (NYSE: XOM) is one of the stocks I always seem to be talking about, but that’s because I believe it’s one of the highest-potential blue chips out there. The world’s largest oil company came in with blowout Q2 profits of $7.6 billion, almost +10% ahead of analyst estimates. Some pundits worry about XOM’s hefty exposure to natural gas. (The XTO acquisition, now complete, vaulted Exxon into first place among U.S. gas producers.) However, the domestic gas glut may be ebbing, and underground storage is running about -6% below last year’s levels.

Looking forward, high-cost producers are shutting down wells, leaving the field to more-efficient operators like XOM as crude oil prices stay relatively low. Trading at less than 10X estimated year-ahead earnings and holding $13.2 billion of cash (up
$2.4 billion just since the close of 2009), Exxon is a financial fortress with a penny-stock price tag. Sweetening the pot is a current dividend yield of 3%, with increases 28 years in a row.