Tap into a Passive-Income Powerhouse with Exxon Mobil Stock

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  • Exxon Mobil (XOM) is preparing for an earnings boost due to elevated oil and natural gas prices.
  • At the same time, the company remains committed to emission-reduction initiatives.
  • XOM stock looks ripe for the picking as its valuation is reasonable and Exxon Mobil pays a generous dividend.
XOM stock - Tap into a Passive-Income Powerhouse with Exxon Mobil Stock

Source: Jonathan Weiss / Shutterstock.com

Do you like to leverage the compounding effect of dividend reinvestment? It’s a savvy long-term strategy to consider as Exxon Mobil (NYSE:XOM) offers solid dividend payments. In addition, Exxon Mobil’s commitment to both fossil-fuel drilling and emission-reduction efforts makes XOM stock a sensible portfolio pick.

After all, you don’t have to pick between oil drillers and carbon-capture companies when Exxon Mobil offers the best of both worlds. You also don’t have to decide between value and growth as Exxon Mobil fits nicely into both categories.

Plus, there’s an earnings event this month that could give Exxon Mobil another opportunity to demonstrate its energy-market leadership. Indeed, a fresh company update signals that Exxon Mobil’s results should continue to show strength for the foreseeable future.

XOM Exxon Mobil $85.64

What’s Happening with XOM Stock?

Unlike many other mega-cap stocks, XOM stock has performed well in 2022 so far. The stock started the year at $63 and change, and recently maintained a firm position in the $80s.

Yet, even while Exxon Mobil’s investors fared relatively well during 2020’s first half, this doesn’t mean that the stock is overvalued. If anything, Exxon Mobil’s trailing 12-month price-to-earnings (P/E) ratio of 14.3 indicates that there’s a bargain to be had here.

What about passive-income investors? No worries, as there’s something here for you as well. Exxon Mobil offers a forward annual dividend yield of 4.1%, so feel free to reinvest the distributions and see how the compounding effect can enhance your portfolio’s returns.

Prospective shareholders should also note that Exxon Mobil has an upcoming quarterly earnings event on July 29. This could have an impact on the XOM stock price, of course.

There’s no need to worry, though, as a company update indicates that Exxon Mobil expects $11 billion in upstream earnings for 2022’s second quarter. This, if it works out as expected, would represent the highest such figure for Exxon Mobil for any quarter since 2017.

Drilling and Capturing

As the numbers reveal, Exxon Mobil is still a power player in fossil-fuel drilling. In the U.S. Permian Basin, the company expects to produce over 550,000 oil equivalent barrels per day this year. This would signify a 25% production increase over the increase achieved in 2021.

Yet, even while Exxon Mobil drills aggressively, the company seeks to “achieve net-zero scope 1 and 2 greenhouse gas emissions from operated assets by 2050.” It’s a dual objective as energy users need petroleum products in the short term but can adapt to alternative fuels eventually.

To that end, Exxon Mobil subsidiary XTO Netherlands is working with Neptune Energy, Rosewood Exploration and EBN Capital to advance an offshore carbon capture and storage project in the Dutch North Sea.

This L10 carbon capture and storage project comes in the wake of Neptune’s successfully completed feasibility study. Amazingly, this project could potentially store $4 million to $5 million tonnes of CO2 annually in selected areas. It could prove to be pivotal as the Netherlands strives to achieve its net-zero goals over the coming years.

What You Can Do Now

Exxon Mobil is, clearly, highly active in fossil-fuel drilling. Yet, investors can take a passive approach with XOM stock by reinvesting the generous dividends.

Furthermore, investors who are interested in carbon-capture projects should also consider taking a position in Exxon Mobil shares. No matter how you slice it, Exxon Mobil remains an energy-industry giant with no shortage of value for its shareholders.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.


Article printed from InvestorPlace Media, https://investorplace.com/2022/07/tap-into-a-passive-income-powerhouse-with-xom-stock/.

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