Top energy giants wrestled with oil price volatility in 2019. Indeed, this has been a reality for top oil-producing companies since the price shocks of 2014-2015.
This does not mean that investors should avoid oil-linked stocks altogether. Today I want to look at an oil giant that has been battered over the past year, but also boasts an enticing history of dividend growth.
Exxon Mobil (NYSE:XOM) is one of the largest oil producers in the world. Its shares have dropped marginally year-over-year as of close on January 17. Investors can expect to see its fourth-quarter and full-year results for 2019 later this month.
In the third quarter, Exxon was pummeled as earnings dropped 49% from the prior year. This was largely due to falling oil prices that occurred in the quarter. However, it did report $65.05 billion in revenue and $0.75 in earnings per share. Both beat analyst expectations. Downstream and chemicals income both increased from the previous year.
Like other energy giants, Exxon is divesting assets in order to reorient its business for the future. It expects to generate roughly $15 billion in cash by 2025 on the back of these divestments. This will give a boost to a mediocre balance sheet. It should also provide some relief for nervous income investors.
Exxon has increased its dividend for 37 consecutive years. It currently offers a quarterly dividend of $0.87 per share, which represents a strong 5% yield. The stock possesses a price-to-earnings ratio below 20 and a price-to-book value of 1.5.
Shares last had an RSI of 42, as it is trending towards technically oversold territory. I like Exxon as a buy-low candidate ahead of earnings.
