Yesterday, U.S. markets edged higher as oil prices rallied. Exxon Mobil Corporation (NYSE:XOM) also reported better than expected fourth-quarter earnings earlier this week, adding fuel to yesterday’s energy sector rally.
With oil prices recovering, is now a good time to buy XOM shares?
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 stock pays a 3% 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, XOM earnings were $6.57 billion or $1.56 per share, trouncing analysts’ estimates by 16.4%. Meanwhile, Exxon Mobil’s total revenues for the quarter slid 21% year-on-year to $87.28 billion, missing analysts’ estimates of $87.58 billion.
For fiscal year 2014, Exxon Mobil posted net earnings of $32.52 billion, or $7.60 per share, higher than last year’s $7.37 earnings-per-share. Total revenues for the year fell 6% to $411.94 billion.
Analysts expected Exxon to report $7.48 per share on revenues of $413.06 billion. So, Exxon beat earnings estimates and missed sales projections. Looking ahead, XOM expects to repurchase $1 billion of its stock in the first quarter.
Exxon Mobil – Current Ratings
For several months Exxon Mobil stock has been rated as a “sell,” which is not surprising as XOM’s buying pressure is very weak, receiving a D for its Quantitative Grade.
On the fundamentals side, XOM does well in terms of its return on equity (A), earnings momentum (B) and earnings surprises (B). Meanwhile, Exxon Mobil stock fails in sales growth. All other metrics earn lackluster C grades. Overall, XOM earns a C for its Fundamental Grade.
As of this posting, Feb. 4, I consider XOM a D-rated “sell.”
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.
