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…
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!