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Exxon Mobil Analysis (#XOM)

Exxon Mobil Analysis (#XOM)

31 March 2021

Exxon Mobil is an American company, one of the largest oil companies in the world. It is also one of the largest corporations in the world by market capitalization. The main oil reserves are located in Asia and the United States, natural gas-in the United States, Australia, Asia and Europe. The company in its current form was created in 1998 as a result of the merger of Exxon and Mobil. The company also owns a large network consisting of 20.8 thousand gas stations, including 10.76 thousand in the United States, 2035 in Canada, 5833 in Europe, 1593 in the Asia-Pacific region. The income from them is in the form of royalties for the use of the Exxon and Mobil trademarks.

ExxonMobil’s main competitors are multinational oil corporations such as Chevron, Conoco Philips, Philips66 and BP. As well as the largest Russian oil companies Gazprom and Rosneft.

Revenue for 2020: $178.5 B (-30% y-o-y)

Operating loss for 2020: $29.4 B

Net loss for 2020: $22.4 B

Earnings per share for the latest quarter: $0.03, up from $0.01 forecast

The crisis has seriously affected the company’s financial performance. The main factor was the fall in oil prices.

Geographical distribution of revenue:

United States – 48.50%

Canada – 18.55%

Australia – 7.57%

Singapore – 6.21%

Kazakhstan – 4.55%

Papua New Guinea – 4.00%

Nigeria – 3.25%

Investors love the company for its stable, high dividends. In the spring of last year, the yield on the company’s securities was about 8% per year, which is a very good indicator for the American roar. At the moment, the forward dividend yield is 6%, which is also quite a good indicator. It is also worth noting that the company is a dividend aristocrat, that is, it pays dividends quarterly and increases them for quite a long time.

However, it is worth taking into account that ExxonMobil has a fairly high break-even threshold. According to analysts, the company can make a profit only if the price of oil starts at $ 50 per barrel. Which, of course, is a serious risk for investors.

Thus, ExxonMobil is a mature company that generates stable cash flow for its shareholders. However, the company’s marginality leaves much to be desired, because the company’s business can be seriously affected due to prolonged crises that will lead to a decrease in the price of oil.

31 March 2021
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