XOM Stock Analysis | Should The Exxon Mobil DIVIDEND Get Cut? XOM Is Becoming A BUY!

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Since 2015 the energy sector has underperformed the market. Exxon's stock, particularly, is down 47% year-to-date and nearly 70% since its 2014 peak, and Exxon keeps taking shots.

Oil prices have declined nearly 32% year to date, while the Energy Select Sector SPDR Fund (XLE), which tracks energy stocks, has lost nearly 50%.

Since the Roni Roni came sweeping through, it turned the already downtrodden oil industry even more on its head. Then, to make matters worse, Exxon was even kicked out of the Dow Jones.

But this is the thing; investors make the biggest return when a company is beaten down. Exxon is beaten down. In fact, just today, they had some more bad news come out regarding some leaked documents and their emissions plan.

Exxon Mobil is the largest direct descendant of John D. Rockefeller's Standard Oil, which was formed in 1870. Let me repeat that, formed in 1870, and it remains one of the most significant revenue earning companies in the world. That's 150 years. In 1911, an anti-trust ruling broke up Standard Oil into 34 companies, including what would eventually become Mobil and Exxon — in 1966 and 1972.

Exxon and Mobil were two separate companies until they merged in 1999.

And since 1870, these companies have survived every down turn in the market. For me, it's always hard to bet against that kind of resiliency.

Now I know what you're probably thinking, omg the world is becoming less and less dependent on oil and gasoline. California already announced they would not sell any more new gasoline powered vehicles by 2035. But I still find it hard to believe that Exxon will be the Blockbuster of the energy sector. They produce and do a lot more than just oil.

Darren Woods, the Exxon Mobile CEO, had this to say, Roni Roni has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins."

"Economic activity will return, and populations and standards of living will increase, which will, in turn, drive demand for our products and recovery of the industry."

#XOM #Exxon #Exxonmobil
Exxon has been in the news as of recent regarding that massive dividend of 10%. For a company that has been struggling with losses, the dividend continues to come into question whether they can maintain it or will it get cut.
At 10%, Exxon is more known for its dividend than growth.

Exxon's problem is that if they cut their dividend, they'll likely lose many investors, but if they don't, how long can they afford to keep paying.

Cutting their dividend could be the best option from a long term perspective. Use that much-needed cash to help with R&D, pay down debt, hell save the company and jobs.
They could potentially compromise by cutting the dividend by 50%, leaving around a 5% yield. A 5% yield is still indeed meaty enough to keep people interested in that dividend. Plus, you would save an enormous amount of cash.

I'm not the only one who thinks this, Boris Schlossberg, managing director of FX strategy at BK Asset Management, told CNBC's "Trading Nation."

"I think the energy sector at this point presents a pretty decent value, especially because right now, from a financial point of view, there's a sort of a game of chicken going on as far as dividends go."

"Now, if they do cut their dividends — let's say they even cut it by half — that still makes it a very attractive yield and at the same time also lowers their cash flow needs and therefore I think is a chance for the stock value to go up."

I wouldn't mind a complete cut of the dividend because I will hopefully live long enough to see it come back around, but I can understand seniors' concerns that count on that money for their income.

"If you're a long-term holder, this is one of those great opportunities where you have a chance to buy a very, very beaten-down sector relatively cheaply for the intermediate term, even though, very long term."

Now this time last year, Exxon Mobil was trading for around $68. As of today, they are trading for approximately $33.45. More than a 50% drop off. However, they are still holding a fair value of $74.

While investors have continued to watch that share price fall, and with a dividend cut on the horizon at some point, it is likely to drop some more, but how low of a share price turns this stock into a buy.
At $33, investors should begin taking notice of this stock. If it falls into the $ 20's, you should really start thinking about adding some to your portfolio, but only if you're looking for a long term position.

Boris also mentioned that "those dividends [are] really great right now. Even if they do end up cutting those dividends, you could see a flush. I think that flush would be a buying opportunity," Baruch said. "So, I've begun to allocate in the space, and I think there's good value there over the long run."

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