Recent Buy – XOM

Well, that didn’t take very long.  A couple of days go by, and another purchase for the Portfolio has occurred.  This time it was Exxon Mobil (XOM).

As you probably know, XOM is an integrated oil and gas company engaged in the exploration of, and production of, crude oil and natural gas.  It is also engaged in the manufacturing, transportation and sale of crude oil, natural gas and petroleum products.

Similar to my purchase of Realty Income (O) a couple of days ago, this was a small add to an existing position.

XOM recently released their quarterly earnings report, and it wasn’t viewed favorably as the company missed revenue and earnings expectations.  Combine that with the recent downward movement of the energy sector, and market as a whole, and XOM had a swift plunge in price.  A decline from $89 to $76 in six trading days!  It was a move from the 52-week high to the 52-week low.

Here are my purchase details…

 

XOM

On 2/8/18, I purchased 20 shares at $76.25/sh, for a total of $1,525.00.

The yield on these additional shares is just north of 4.0%, which is about as high as XOM’s yield has been in the past 20 years.

I now hold 100.475 shares of XOM.  This purchase results in an additional $61.60 in annual forward dividend income, bringing my forward dividend total for XOM to $309.46.  This means I can expect over $77 every quarter from XOM.  Reaching the 100 share total allows me to sell covered calls on XOM in the future, if desired.

XOM is the only energy company in my Portfolio.

While XOM did disappoint this quarter, I remain optimistic that the pick up in oil prices in the past year with help them in 2018.  XOM did have a much better year in 2017 than in 2016 with regard to revenue and earnings.  They also increased their expenditures this past year as they invest for the future (although this had a negative impact on 2017 results).  So, I think better times may be ahead for XOM.  They should benefit from the recent tax cuts as well.  While I wait for the business to improve, I’ll continue to collect and reinvest the dividends.

 

What do you think of XOM as this level?  What’s the outlook for XOM in your mind?  I’m sure you’ve had some portfolio stocks get walloped recently.  Which ones look oversold to you?   Please feel free to share in the comments!

Posted on by Engineering Dividends

17 thoughts on “Recent Buy – XOM”

  1. Long term good company I have 113 shares of it so I’m not going to add at the moment. My mom gifted me the shares. I want to add a little bit more cash to the account. Hopefully we get a nice dividend raise next month.

    1. Hi, Doug. Nice gift you got! Adding/Having some cash will be a good thing, especially if stock prices continue to drop. Hopefully, XOM will feel good enough about their future prospects to best the 2.67% dividend raise from last year. Thanks for stopping by and commenting.

  3. Hey ED, I added to O and D in January. I added to Southern (SO) yesterday. REITs and utilities have corrected more than the overall market. I think your recent purchases of XOM and O are solid buys. I own XOM and CVX, but havn’t paid much attention to them since oil prices have recovered from their bear market. Tom

    1. I like your additions, Tom. I’m slated to become a D shareholder if the merger with SCANA (SCG) goes through. There appears to be major uncertainly about that though.
      As for SO, I could soon be a shareholder as well. I have an open put option on them ($45 strike) that expires next Friday. If assigned, my cost basis would be $44.

  4. Wow that was a swift decline! Looks like a nice buy though ED – always great to snap up a decent business when the stock plummets. I’ve never had much exposure to the energy industry, but your logic sounds pretty good to me.

    1. It was a swift decline alright, and after it was so steady most of last year, especially the 1st half of 2017. It wasn’t a big addition on my part, but I was able to average down a bit (so that’s nice), and boost my forward dividend income. Thanks for checking out the site and leaving a comment, Frankie! I hope you become a frequent visitor.

  5. Hey ED,

    nice addition at the right time. After last week XOM yields a solid 4% again. I stayed on the sidelines last week but made a regular purchase the week before. Royal Dutch Shell, the oil giant from Europe.
    If the volatility in the markets remains high and some top dividend names like Johnson&Johnson, PepsiCo or AT&T for example drop some more, i’ll use a part of my cash reserve to “grab” them…

    Greets
    DividendSolutions

    1. Hi DS. It didn’t take long for many of the best names to drop to levels we hadn’t seen in quite a while. I’m with you, watching for opportunities. I hope you get to snatch up some of those names you’ve had on your watchlist for a while. Thanks for sharing your thoughts.

  6. Hi ED. I own 160 shares at about $85 per share, so my investment is down right now. But this is a solid company and I’m going to keep averaging into this stock when I’m able.

    Morningstar rates the stock well, and has a $78 price target, so I think you did well.

    You will enjoy the dividend on this one. Happy investing!

    1. Thanks, DF. Yeah, I’m down on XOM for now, too. My new cost basis just under $81. Oil stocks will have their day again. In the meantime, I’ll be happy to collect the dividends.

  7. Nice buys Ed I have also added O,XOM and HML this week. thanks for sharing your buys.

    1. Hey Wayne! Glad to hear that O and XOM made your purchase list, too. I assume you meant Hormel (HRL), instead of HML? If so, HRL is looking interesting at current levels as well. I averaged down on it last August. It appears to be approaching that $31-$32 level again thanks to the recent market decline.

  8. Engineer, I just initiated a position for myself. I bought 13 shares at $77. This is a huge oil/gas company with a great track record and is now yielding 4% sign me up!! We scooped up some shares just before the ex dividend date as well!

    1. Hi MH. Glad to know you’re a fellow XOM shareholder. I hadn’t realized I bought on the last day prior to the ex-dividend date… a nice surprise. Thanks for pointing that out. I guess I can expect a little extra boost in the March dividend from XOM!

  9. I think XOM is smart long-term. Energy prices are on the way back up, but operational costs are streamlined more now than before. Technology continues to improve in the industry and drives better production for less cost, making activity profitable at lower prices.

    I have a small exposure through my VGENX mutual fund (XOM makes up 8.89%, the top single holding in that fund).

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