Dividend Stock Wednesday: Exxon Mobil (XOM)

Written by The Dividend Guy on January 2, 2008

ExxonMobil

Note: I use a combination of the Stock Selection Guide Software and its methodologies from the CSA and my own investment approach to perform the bulk of my analysis on stocks. This is not a recommendation to buy a stock - it is my analysis only. Please do your own research.

This weeks Dividend Stock Wednesday kicks of the first time I am using a new format, partially inspired by the work of Dividends4Life. It is still a work in progress, but it is some further insight into my approach to looking a dividend growth stocks.

The stock I am looking at this week is Exxon Mobil (XOM). XOM recently entered the Dividend Aristocrats as it has 25 years of uninterrupted dividend increases, which is a big plus for the stock. However, I do not like the valuation of the stock nor a couple of other fundamental items. Below are two images that present the results of my analysis. Page 1 is the data sheet and page 2 is a description of each of the fields and how the scoring works.

Dividend Stock Analysis - Exxon Mobil Page 1Click to Enlarge

Dividend Stock Analysis - Exxon Mobil Page 2Click to Enlarge

Overview:

The Dividend Guy Rating: 5.5 out of 10 (I look for at least 7 out of 10)
Buy Price Range: $66.39 to $94.66
Current Price: Overpriced
Dividend Growth Rate: Does not meet my 10% growth rate requirements at only 5.62%
EPS and Revenue Growth: The EPS growth over the past 5 years has been very strong, but over the past 10 years both earnings and revenue has been not as consistent as I typically like to see.

Keep in mind that Exxon is in a cyclical business so I suspect that the company may see some pressure in the next few years on earnings, especially with depressed gas prices we are seeing. In addition, Exxon is a massive company and consistent growth at its size is difficult, but not impossible. It will require strong leadership and strategic decision to ensure the company can continue to grow earnings and revenue at the pace they are doing now. As such, I would need to see the company’s share price much closer to the low part of my buy range before I were to pull the trigger.

This post includes images which present my analysis. If you are viewing this post in a feed reader, please be sure to visit my actual site to ensure you see the full contents. Thank you.


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3 Comments so far

  1. Dividends4Life January 2, 2008 12:14 pm

    TDG: I like your new format! :) Then again, I am a data junkie.

    Best Wishes,
    D4L

  2. Jony carter January 4, 2008 12:25 am

    The expenses, genuine or not are very hard to contain, result being a number of debts and various unpaid bills all with various rates and fines. So what do we do to counterfoil them? Where do we seek asylum? Debt and bill consolidation have been designed to wipe out these problems in one stroke. These loans provide amount to clear all the debts and unpaid bills like electricity bills, phone bills or our credit card bills. To find bad debt management, advice debt management consolidation, debt management uk, credit card debt management visit http://www.ezdebtmanagement.co.uk

  3. Barrack Obama August 11, 2008 11:48 pm

    I hate big oil companies, but the no-fee drip that Exxon offers is one I can endorse my entire campaign on.

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