Exxon Mobil Stock Continues to Be a Solid Long-Term Investment

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Exxon Mobil (NYSE:XOM) stock is finally getting some much-needed traction after trailing the broader market for most of 2019. XOM stock is not a favorite among Wall Street analysts who often question the company’s aggressive spending

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And the ongoing trade war hasn’t helped as analysts became more concerned about the energy demand. Most analysts give the stock a “hold” rating and the average price target is $80.36, representing an upside of nearly 11%. 

But toward the end of August, Exxon stock found the momentum it needed and its shares rose steadily for 10 days straight. This is the company’s longest run since November 2011.

And on Monday, XOM stock received a boost after a drone strike hit a large oil processing facility in Saudi Arabia. This closure cut Saudi oil production by 50% and caused oil prices to rise by more than 14%. The broader stock market fell, but energy companies like Exxon and Chevron (NYSE:CVX) saw slight gains.  

The winning streak ended on Tuesday when the stock dropped just under 1%, but XOM stock still has a lot of potential. Here are three things to like about the company.

XOM Stock Is Poised for Growth

Exxon Mobil is one of the largest energy companies in the world and it is a very diverse company to invest in. Investing in XOM stock gives you access to both the oil and natural gas sectors. 

And in 2018, management outlined an aggressive plan to double its earnings by 2025. The company continues to fund capital projects and it has been seeing returns from its onshore U.S. drilling efforts. 

The Company Pays Healthy Dividends

Exxon pays a healthy dividend — and it has been steadily rising over the past 36 years. 

It even paid out a dividend in 2014 during the oil downturn when many of its competitors were eliminating dividends. If consistency is your goal as an investor, it’s hard to beat history like that.

Exxon Stock Is a Low-Risk Investment

Ultimately, Exxon Mobil isn’t the most exciting company to invest in, but it is fairly low risk. It’s not a bad option for more conservative investors who are looking for steady dividend payments.

The company’s long-term debt accounts for less than 10% of its capital structure. The company is well run and it has shown it can stand the test of time. Gas and energy stocks may have fallen out of favor with Wall Street, but both are vital to the global economy. XOM stock will likely continue to be a solid investment for years to come. 

As of this writing, Jamie Johnson did not hold a position in any of the aforementioned stocks.

Jamie Johnson is a personal finance freelance writer and has been writing for InvestorPlace since mid-2019. She writes for a number of other well-known financial sites, including Credit Karma, Quicken Loans, and Bankrate.


Article printed from InvestorPlace Media, https://investorplace.com/2019/09/xom-stock-long-term-investment/.

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