But the problem is the stock is still falling. This goes to show that there's only so much Exxon can do to limit its losses when much of its business is based on elements outside of its control. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Before the pandemic, Exxon was planning on averaging $30 billion to $35 billion in annual capital expenditures over the next five years and $33 billion in 2020.

Now that Royal Dutch Shell cut its dividend, Exxon's spending and its dividend obligation are the largest of all oil majors. It is inching higher as more believe that the company cannot sustain its dividend. Source: Michael Gordon / Shutterstock.com, Exxon Mobil’s Commitment To Its Dividend Is Pushing Its Yield Higher, 10 Growth Stocks That Could Seriously Double, stop matching its employees’ 401(k) contributions, 3 Reasons to Inject Your Portfolio with Sorrento Therapeutics, Matt McCall and the InvestorPlace Research Staff, Buy Piedmont Lithium Stock Now for Unique EV Exposure, Louis Navellier and the InvestorPlace Research Staff, Trump vs. Biden: Stocks to Buy No Matter Who Wins the White House, 7 Elections Stocks You Definitely Want To Avoid Leading up To the Big Vote, 7 Value Stocks To Buy Today For Security And Consistency, Despite Its Huge Run-Up, Hyliion Stock is Still a Long-Term Buy, 7 Big Tech Stocks to Buy for Blockchain and Crypto Exposure, Exxon Mobil Stock Is Still a Buy and for the Right Reasons. What is in Exxon's control is its dividend.

Why ExxonMobil Stock Dropped 14.1% in September, Leaked Documents Reveal ExxonMobil Plans to Increase Carbon Emissions 17% by 2025, Copyright, Trademark and Patent Information.

They want to keep their “S&P Aristocrat status.”.

Historical dividend payout and yield for Exxon (XOM) since 1989. Inadequate cash flow has pressured Exxon to raise debt at the expense of its balance sheet. And with West Texas Intermediate (WTI) crude oil prices now below $40 a barrel, Exxon's dividend -- which yields over 9% -- may be in trouble. But there isn’t enough cash to cover this. Therefore, most investors in the stock should attempt to average cost as Exxon Mobil stock falls. Lower demand for transportation fuels like gasoline, diesel, and jet fuel plunged Exxon's refining margins to 50% below 10-year lows, which reduced earnings by $600 million in Exxon's second quarter. It has since decreased estimated 2020 expenditures to $23 billion, which it's on track to hit after notching $12.47 billion in capital and exploration expenditures in the first half of this year. At today’s price of nearly $41, the stock’s yield is now 8.5% even though the company didn’t cut the dividend. Stock Advisor launched in February of 2002. XOM Debt To Capital (Quarterly) data by YCharts. It did not say how much this would save. Moreover, next year they aim to cut capex by another $4 billion to $19 billion, according to Seeking Alpha. Investors would … The market is scared that Exxon Mobil will eventually cut the dividend. It's understandable that Exxon's balance sheet would take a hit from the effects of the COVID-19 pandemic. As I pointed out in my previous article, Exxon’s management has made a red-line commitment to maintain the annual $3.48 dividend per share. And even if it doesn’t, the stock loss makes keeping the dividend moot. Let's conquer your financial goals together...faster. Financial metrics like debt to capital, debt to equity, and total net long-term debt are all on the rise, indicating that Exxon's balance sheet is now in its worst shape in five years.

Moreover, Exxon will “further reduce Opex and efficiently reduce Capex” in order to “maintain the dividend.”. If the company can cover the dividend with debt, the gain will eventually be for shareholders. That represents a cash outflow of more than $8.1 billion and no positive cash inflow to cover these expenses. Chart. 1125 N. Charles St, Baltimore, MD 21201. Aside from this spending, Exxon paid $7.43 billion in dividends, but only brought in $6.27 billion of cash flow from operating activities in the first half of this year. 2020 InvestorPlace Media, LLC. It has now paid the same quarterly dividend for six quarters. Mark Hake runs the Total Yield Value Guide which you can review here. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Exxon was replaced by tech giant Salesforce.com at the end of August as the index adjusted to better reflect the modern economy. Often overlooked is the sheer size and impact of Exxon's refining business. That's an attractive … The current dividend yield for Exxon as of October 12, … Returns as of 10/16/2020.

But here is the problem. The dividend usually rises after four quarters. That is wholly unexpected since one would assume that with the maintained dividend the stock would rally. But until Exxon can prove it can generate enough cash to cover its spending and its dividend obligation, the company's stock seems too risky to invest in at this time.

At today’s price of nearly $41, the stock’s yield is now 8.5% even though the company didn’t cut the dividend. As of this writing, Mark Hake, CFA does not hold a position in any of the aforementioned securities.

ExxonMobil stock packs a chunky 4% dividend and is backed by a dependable business that has allowed the company to increase its payout annually for 36 years running. Copyright © 2020 InvestorPlace Media, LLC.

Review XOM dividend yield and history, to decide if XOM is the best investment for you. Investors would probably be better off with other top oil stocks instead. When he's not writing, Daniel can be seen floating down the bayou, taking it easy to the tune of sweet summer cicadas and hot humid air. In fact, it borrowed $almost $15 billion last quarter. Seeking Alpha wrote that this dividend commitment comes at a significant cost.

The current TTM dividend payout for Exxon (XOM) as of October 12, 2020 is $3.48 .

They see the dividend akin to a bond coupon payment. In 2019, Daniel joined the Fool as a contract writer, targeting the energy and industrial sectors from his hometown in Houston. Although a dividend cut would end Exxon's 37-year streak of consecutive dividend raises and strip it of its status as a Dividend Aristocrat, it's really one of the few remaining options Exxon has left aside from taking on more debt, selling more assets, of laying off some of its workforce.

Copyright © At the time, Exxon Mobil stock was at $42.50 and had an 8.2% dividend yield. Cash flow from operations was zero, capex cost $4.4 billion and the dividend cost $3.715 billion. He expects debt to rise from 17% to 27% of total capital by the end of the year. They are cutting operating expenses by 15% and claim to be ahead of schedule in this. quotes delayed at least 15 minutes, all others at least 20 minutes. Exxon Mobil Corporation (XOM) Dividend Growth History: By month or year. Cumulative Growth of a $10,000 Investment in Stock Advisor, How Safe Is ExxonMobil Stock and Its Dividend? Exxon Mobil stock now has a very high dividend yield of 8.5%. At the time, Exxon Mobil stock was at $42.50 and had an 8.2% dividend yield. 1125 N. Charles St, Baltimore, MD 21201. That impact was nearly enough to offset the $800 million in savings Exxon generated across its business.

The company was once considered a blue chip darling of the Dow Jones Industrial Average (DJIA) before being removed from the Dow after nearly 100 years. Meanwhile, shares of Exxon are down 45% year to date, underperforming the market and the broader energy sector as a whole. Exxon Mobil (NYSE:XOM) declared another quarterly dividend even though it clearly cannot afford it. They are on track to cutting capex spending from $33 billion to $23 billion. Exxon has had a rough go of it over the last few months. You’ll get the name & ticker of Matt McCall’s top pick when you tune in to his FREE event. See you at the top!

Exxon's COVID-19-related first- and second-quarter losses were its first quarterly losses in decades. Senior Vice President Neil Chapman said on a conference call about the dividend: “A large portion of our shareholder base has come to view that dividend as a source of stability in their income, and we take that very seriously.”.

For example, Marketwatch points out that Exxon Mobil has maintained its dividend for 37 years, and Chevron (NYSE:CVX) has paid its dividend almost as long. Cutting it would hurt shareholders’ income. Daniel began his Foolish journey posting on The Motley Fool discussion boards, hyped on caffeine and providing commentary on Starbucks, Target, and Apple through the lens of a teenager. Dividend history includes: Declare date, ex-div, record, pay, frequency, amount. But until Exxon can prove it can generate enough cash to cover its spending and its dividend obligation, the company's stock seems too risky to invest in at this time.

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That is unusual. Market data powered by FactSet and Web Financial Group.

But that is clearly not what the present management intends. Oil titan ExxonMobil (NYSE:XOM), remains one of the few oil majors that hasn't cut its dividend this year. But this accomplishment is more due to Exxon being stubborn than it is to Exxon outperforming its competitors. Both outcomes are unfavorable. Exxon is serious about maintaining the dividend.

Exxon Mobil had just $2.8 billion before borrowing another $9.9 billion during the quarter to pay for the dividend and capex.

Should You Sell Your Oil Stocks Right Now? In fact, on Aug. 4, Exxon told its employees that it would stop matching its employees’ 401(k) contributions starting in October. As much as ExxonMobil would like to preserve its dividend, the reality is that lower oil prices and refining margins are pressuring the company to either take on more debt or cut its dividend. In a presentation, Exxon says it has three capital allocation priorities: invest in advantaged projects, maintain a strong balance sheet and provide a reliable and growing dividend.

It quoted RBC analyst Pavel Molchanov as saying that cash flow covers just 70% of the dividend and capex.

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If the yield rises over 10% that is a very strong signal that most analysts and people expect the dividend will be cut. While Exxon's exclusion from the DJIA may sting the company's pride, a much more pressing matter is the lack of cash that's flowing in to fund its dividend. Article printed from InvestorPlace Media, https://investorplace.com/2020/08/exxon-mobil-stock-8-5-percent-dividend-yield-could-rise-even-higher/. I believe that is the most likely case here. @themotleyfool #stocks $XOM $CRM, Why ExxonMobil Stock Bounced as Much as 5% Today, Chevron Dethrones Exxon as the Largest U.S. Oil Company. Nasdaq All rights reserved.

The Man Who Recommended 23 1,000% Winners Is Revealing His #1 Stock for 2020. Dividend aristocrats are those companies with 25 years or longer continuous dividend track records.