Exxon Mobil Stock Analysis

I think this company must be the biggest oil and gas company in the world, Exxon Mobil (XOM). But of course, if you ask Shell, they would say otherwise. With the recent drop with oil prices, I think it might be a good time to just check out a good stock like Exxon Mobil to see if we can get a good buy. I suspect we probably will find an undervalue stock here in Exxon Mobil. Let’s find out if my hunch is right in this Exxon Mobil Stock Analysis.

As always, my goals with this Exxon Mobil Stock Analysis is to keep things simple and straightforward with no bias. Remember to leave a comment at the end of this analysis if you find it helpful…

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Exxon Mobil Stock Analysis – Business Snapshot

Exxon Mobil Stock Analysis Business SnapshotExxon Mobil Stock Analysis – Business Snapshot

If you stay anyway in civilization, you would have heard of Exxon Mobil. They are (in my opinion) the largest oil and gas company in the world and one with a long history too. And I feel this is timely to get involved with Oil and Gas with oil prices down quite a bit… well…actually oil price crashed and it has affected many oil stocks which is great timing for us. At the moment, there is plenty of fear with oil and gas but I feel this fear is overplayed. We won’t stop using oil and gas in the near foreseeable future. Hence, if we go into oil and gas, we go in with confidence…

Exxon Mobil Stock Analysis – Earnings Per Share

As always, we take a look at any company (good or bad) earnings history and I like to look at a 10 year track record. Exxon Mobil certainly has 10 years record and more….

Exxon Mobil Stock Analysis - 10 year Earnings Per Share History
Exxon Mobil Stock Analysis – 10 year Earnings Per Share History

I would say that for a matured company it’s expected that Exxon’s EPS track record is about flat… in fact, slightly declining. Without looking at their stock price history, I assume it’s also flat. I might be wrong here but I have yet to look at their stock price which I usually leave towards the end of the analysis… Good matured company but no longer growing in earnings. With EPS like this, it does not look like Exxon price is gonna move up anytime soon.

Exxon Mobil Stock Analysis – Debt Equity Ratio

Exxon Mobil Stock Analysis - Debt Equity Ratio
Exxon Mobil Stock Analysis – Debt Equity Ratio

This is expected of Exxon to be debt free…well almost debt free. A BIG plus here for Exxon.

Exxon Mobil Stock Analysis – Return on Equity

Exxon Mobil Stock Analysis - 10 year Return on Equity Track Record
Exxon Mobil Stock Analysis – 10 year Return on Equity Track Record

Of course, discounting this past year, Exxon Mobil ROE % is reasonable strong which is a sign of a good company in the hands of good/decent management team. Let’s get further confirmation from their Operating Cash flow.

Exxon Mobil Stock Analysis – Operating Cash Flow

Exxon Mobil Stock Analysis - 10 year Return on Equity Track RecordExxon Mobil Stock Analysis – Operating Cash Flow

Good operating cash flow. Did you know that if you look at Enron’s operating cash flow back in 2000s, you probably spot their scam? Yep… Enron had negative operating cash flow which is why is so important to check operating cash flow to make sure that a company’s books jive. And Exxon Mobil’s books look in order. Always good to see a company with positive operating cash flow over a 10 year period. Now the big question…

Should You Buy Exxon Mobil Stocks?

I guess at the end of every stock analysis… the most important question is what price should we buy. Well, firstly the company has to be fundamentally solid before we even bother addressing this question. And Exxon Mobil passed our fundamental screen. However, we will value XOM as a dividend stock. XOM certainly is not a growth stock but it has decent dividends and we will value it based as a dividend paying stock. So here’s our valuation…

Exxon Mobil Stock Analysis - Should You Buy Exxon Mobil Stocks?Should You Buy Exxon Mobil Stocks?

At the point of this writing, XOM is priced at $88 and yes! it’s below our valuation. I feel it’s a good buy at current price with the dividend that Exxon pays out. It’s surely providing a much higher yield that savings with the possibility of capital gain. Although I will be buying some to invest, you gotta decide if this is right for you. And only you can decide. I have presented the facts for you…you have to pull the trigger.

Good luck and please leave a comment below as I love to hear from you.

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