Texas’ Exxon Mobil — Leading the Energy Rush

A Texas-size company with Texas-size plans

   

When something is described as “Texas-size,” that means it’s really, really big. Another thing about Texas: It’s so closely associated with oil that the massively popular old TV series about oil baron J.R. Ewing needed just one word for its title — Dallas.

That brings us to Exxon Mobil (NYSE:XOM). Where else could the world’s largest publicly traded integrated oil company be headquartered but in Texas? In Irving, to be exact, which is a cheek-by-jowl suburb of Dallas.

Exxon might now be the quintessential multinational corporation, with operations on six continents, but its roots are purely American. In fact, much of what’s now Exxon Mobil sprang from the old Standard Oil of New Jersey and Humble Oil & Refining Co. of Texas. How’s that for all-American?

Today, Exxon Mobil is clearly a bigger-than-Texas-size giant. With full-year revenue in 2011 of $486.4 billion, net profits of $41 billion, a recent market cap of $390 billion and 4.68 billion shares outstanding, XOM is more like a small country than a corporation. No wonder it’s in the portfolios of investors large and small all over the world.

Enduring through as many energy booms and busts as Exxon has through the years is an achievement in itself. Yet, the company has hardly been shy about investing for the future. Early in 2012, it announced no less than a five-year capital spending plan of a previously unheard of $185 billion — of which $150 will go to new energy exploration around the world.

And for Exxon, energy today means a lot more than just oil. Natural gas has become a major part of its portfolio, along with a wide range of chemicals and energy-saving technologies.

Exxon has seen its share of challenges — and at times disasters. Witness the 1,300 miles of befouled pristine shoreline in Alaska’s Prince William Sound after the Exxon Valdez spilled 11 million gallons (257,000 barrels) of crude when it ran aground in March 1989.

But as its current five-year, $185 billion capex plan shows, Exxon is in it for the long haul. The company just seems to be built that way. Consider that current CEO Rex Tillerson originally joined Exxon in 1975 as an engineer long before entering the executive ranks. Another sign of corporate steadfastedness: Exxon is one of four remaining U.S. companies whose corporate debt gets a top AAA rating from Standard & Poor’s.

Check out the complete list of Real America Index components, along with an interactive map of short-term and long-term returns.

Mike Mercurio is Managing Editor of InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.


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