Exxon Mobil Corporation (XOM) is expected to outperform riskier oil and gas peers through its defensive oil-production strategy in a year where oil prices are are already correcting and are expected to decline due to supply outstripping demand, says Pavel Molchanov, Analyst at Raymond James & Associates, Inc.
“Quite simply, Exxon is a stock that tends to outperform when oil prices are choppy or declining. Conversely, if we thought oil was going to rip higher next year, this would be not be a stock that we would be overly excited about, because by definition it is very defensive and conservative,” Molchanov said.
Molchanov says XOM can fund its entire capital program and its entire dividend payout and still have cash left over to do share repurchases this year, something that sets it apart from the rest of the riskier approach of most oil and gas companies, and he says production was in fact down in 2012.
“[Exxon Mobil is] just a fundamentally well-run, conservatively managed company, and precisely because we think oil has downside next year, we have long been encouraging investors to gravitate towards defensive stocks like this one with solid dividend yields and balance sheets,” Molchanov said.
Chevron Corporation (CVX) and Exxon Mobil Corporation (XOM) Show Dividend Growth Rates Up to 12%
July 08, 2013
Chevron Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM) Set to Weather the Pricing Storm
February 22, 2016
Exxon Mobil Corporation (XOM) Holds Best Assets and Trades Below Appraised Fair Value
April 03, 2013
Exxon Mobil Corporation (XOM) Trades at Reasonable Valuation; Stable Energy Company
July 15, 2013
Exxon Mobil Corporation (NYSE:XOM) Earning Its Cost of Capital to Pay Dividends
October 13, 2016
