Best Dividend Stocks – Is XOM a Buy?

In February 2020, Exxon’s Mobil stock (XOM) dropped by 50%, leaving it with a high dividend yield of over 10%. Many thought it’s dividend would suffer a cut, but Exxon managed to maintain it.
With news on the covid19 vaccine, XOM stock value has seen some increase.
Is there a future for fossil fuels? Is Exxon still one of the best Dividend Stocks? Let’s find out.

Before we keep on going, help us grow: Subscribe here.

Exxon Mobil Dividend Safety

At the time of writing, Exxon Mobil is trading at $39.36 a share with a high dividend yield of 9.42% (!). Is it sustainable?
Exxon is in the midst of asset sales that could reach $25b through 2025, as it looks to free up capital to invest in places as Guyana and Permian Basin.
Looking at it’s finances: Based on Exxon Mobil’s balance sheet as of August 5, 2020, long-term debt is at $46.56 billion and current debt is at $22.95 billion, amounting to $69.52 billion in total debt.’s Considering Exxon Mobil’s $361.50 billion in total assets, the debt-ratio is at 0.19, which is on the low end of its peer group.
Exxon, still a member of the ‘dividend aristocrats‘ has increased it’s dividends for 37 years straight. Dividend stocks with such a title, do everything in their power to keep the status.
While competitors shift from fossil fuels to cleaner energy, Exxon has embarked on a massive capital spending program as it looks to get its production growing again.
With a promising vaccine looming, which should increase oil prices and XOM’s profitability, I see a dividend cut as unlikely.

Better Days Ahead

As the vaccine approaches, hard-hit industries such as aviation will be making a comeback. The aviation industry represents 7.8% of final oil consumption worldwide. Maritime shipping accounts for 6.7%.
According to the global coalition of producers, demand for OPEC-sourced crude oil should recover 25% in 2021 and surpass levels seen in 2019.
On May 6, CNBC published on their website an interview with Orascom Investment Holding Chairman and CEO Naguib Sawiris, he believes the oil price could hit $100 per barrel in around 18 months.

The Future of Oil

Oil and natural gas are set to remain key energy sources for decades.
We use petroleum products to propel vehicles, to heat buildings, and to produce electricity.
The U.S. Energy Information Administration projects in the Annual Energy Outlook 2020 that liquid fuels (petroleum and others) will account for around 35% of total U.S. energy consumption in 2050. A decrease of only 2% compared to 2019 (37%).
Darren Woods said: ‘ We look closely at the facts and the various expert assessments, we conclude that the needs of society will drive more energy use in the years ahead’
We also use oil to make plastic.

Plastic

Plastics are expected to drive most of the future growth in the oil industry.
Michael Carus, nova-institut CEO said – ‘ Send for cement is already becoming a scarce commodity worldwide. In the future, we will no longer be able to build our houses from reinforced concrete, as we do today, but rather from plastics. ‘

Conclusion on Exxon’s Mobil Stock

With everyone else moving away from fossil fuels, XOM is the right stock to own if you believe in oil’s future. Supply disruptions, due to the shut-downs and lack of investments and drilling, could lead to a huge surge in the price of oil. Demand will be back up.
As Warren Buffett would say be “fearful when others are greedy, and greedy when others are fearful.”
I’ve been adding to my XOM position since it dropped to $31.99 on the 28th of October 2020 and I firmly believe the company will make a strong comeback in the years to come, and regain it’s reputation as one of the best dividend stocks.

If this post was helpful and you want to see more, please subscribe. 🙂

The Best Dividend Stocks for 2021 – Buy now?

Best Stocks to BUY NOW: Is this the Best Growth Stock of 2020?

Best Pharmaceutical Stock to Buy now! – ABBV vs JNJ

Google Stock – The Future of Tech. & Revolutionary AI