Choppy trading has dogged Exxon Mobil Corporation (NYSE:XOM) for over a decade now and hasn’t ended so far in 2018. Exxon stock touched a two-year low in late March but since has rallied about 12%.

I bought XOM on the dip in mid-March (though I was a bit early) because, at $73, the stock simply looked too cheap. A 4%+ dividend and a sub-16x P/E multiple both suggested Exxon Mobil growth was soon to stall out. With some help from oil prices, Exxon stock has bounced and I’ve taken short-term profits.

That said, I don’t necessarily think XOM is a sell here. In fact, the company’s newly aggressive strategy could set it up to finally start outperforming peers like BP plc (ADR) (NYSE:BP) and Chevron Corporation (NYSE:CVX), something XOM hasn’t done over the past few years.

But with the stock more reasonably valued and the dividend yield back at a flat 4%, my old concerns about XOM have returned. The internal hedge between upstream and downstream operations make it tough to get too excited about Exxon stock.

For XOM to finally break out of a decade-long range spent mostly between $75 and $90, Exxon’s new strategy is going to have to work and oil prices are going to have to cooperate.

Is This Time Different for Exxon Mobil?

It’s been a difficult decade for XOM stock, which actually is down 8% over the past ten years. There have been a number of reasons. Exxon Mobil was late to the U.S. shale revolution, and it misfired on its 2009 acquisition of XTO Energy, with natural gas prices staying much lower than the company expected.

Development elsewhere has been hit-and-miss, one key reason why XOM has underperformed other integrated rivals like Chevron and Royal Dutch Shell plc (ADR) (NYSE:RDS.A,RDS.B).

Of course, fickle oil and gas markets also have had an effect. West Texas Intermediate crude was over $120 a decade ago, on its way to a peak over $140. Within months, it was at $30, and it would tank again in mid-2015.

Exxon’s integrated structure, with refineries and service stations combined with the E&P efforts, has kept it afloat during those busts. But it also makes Exxon stock a poor direct play on oil, as I’ve argued in the past.

Higher oil prices don’t benefit XOM the way they do for producers like Anadarko Petroleum Corporation (NYSE:APC) or Chesapeake Energy Corporation (NYSE:CHK), because those higher prices also impact profits for the company’s downstream businesses.

And so the performance over the past decade isn’t necessarily surprising or even as bad as an 8% decline suggests. Oil prices are down, but Exxon stock has produced modestly positive returns including dividends. Certainly, execution hasn’t been perfect or even great. But the past decade has been much, much worse for many oil and gas plays.

The question going forward, then, is whether Exxon Mobil can generate enough consistent growth to get earnings and the stock price out of the multi-year rut. And at the least, it appears XOM is going to try.

Doubled Earnings by 2025?

Exxon Mobil CEO Darren Woods already has set a target of doubling earnings by 2025. And in an interview ahead of the company’s annual meeting, Woods gave more color on that plan.

Exxon is planning to spend some $200 billion just on development of existing resources. That assumes crude oil stays above $40 per barrel, according to the CEO. With opportunities in offshore Guyana and Brazil, along with a big buy of acreage in the U.S. permian basin last year, XOM has the potential to ramp up production significantly.

Given that production has been relatively weak, falling in five of the last six years, that could reverse the company’s fortunes, and drive earnings higher.

What’s interesting about the strategy is that it is in direct opposition to the rest of the industry. Chevron is keeping a lid on its capital spending. BP announced late last year that it would start buying back shares, in addition to a 5%+ dividend yield.

Coming out of the shale bust, a number of executives seem more cautious about another bust. Woods, apparently, is not one of them. And if he is right, Exxon stock is likely to outperform the market.

Exxon Stock Is Intriguing but Not Compelling

And so there is a bullish thesis for XOM at these levels. The dividend still yields 4%. Downstream operations provide some cushion if oil prices again reverse. Valuation isn’t prohibitive.

Investors expecting higher oil prices would be better off targeting APC or CHK if their thesis turns out to be right. But XOM now provides a lower-risk, if lower-reward, bet on that same thesis.

Personally, I’m not terribly bullish on oil prices near-term and I still see long-term risks to both supply and demand. Other investors might see it differently, though and if they continue to do so, the recent bounce in XOM is likely to continue.

As of this writing, Vince Martin has no positions in any securities mentioned.