The energy sector has been dominating headlines as oil prices have plunged. Just yesterday, Exxon Mobil (XOM) attracted plenty of attention with its third-quarter earnings report.
Has the price drop impacted XOM earnings? Is now a good time to buy Exxon Mobil stock?
Exxon Mobil – Company Profile
While Exxon Mobil as we know it has only been around since 1999, its roots stretch all the way back to 1870 when John D. Rockefeller founded Standard Oil, the world’s largest oil refiner at the time.
Today, Exxon Mobil still holds that distinction, but has since diversified into other businesses, including chemicals, information technology, real estate and gas and power.
Yield-seekers may like to know that at current prices XOM pays a 2.9% dividend. However, a hefty dividend alone doesn’t guarantee a buy recommendation from me, and here’s why.
Exxon Mobil – Earnings Rundown
For the third quarter, the energy giant reported a 3% annual increase in quarterly profits. Third quarter earnings were $8.07 billion, $1.89 per share, beating analysts’ estimates by 9.5%. Exxon Mobil’s total revenues, while outperforming analysts’ estimates, decreased by 4% to $107.48 billion, down from $112.37 billion the previous year.
Exxon Mobil’s capital and exploration expenditures also fell 7% year-on-year to $9.8 billion. One high note was that Exxon Mobil distributed $5.9 billion to shareholders in the third quarter, and dividends per share increased by 9.5% to 69 cents per share.
Exxon Mobil – Current Ratings
For several months, Exxon Mobil stock has been rated as a hold. It’s not surprising; XOM’s buying pressure is relatively weak, receiving a “C” for its Quantitative Grade.
On the fundamentals side, Exxon Mobil does well in terms of its return on equity (A), earnings momentum (B), earnings growth (B), and earnings surprises (B). Meanwhile, sales growth (D), analyst earnings revision (D), operating margin growth (C), and cash flow (C) could use improvement. Overall, XOM earns a “C” for its Fundamental Grade.
As of this posting, Nov. 4, I consider XOM a “C-rated hold.”
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
