That’s why Exxon Mobil shares are worth buying in 2022 and holding for years.
ExxonMobil (XOM) ended 2021 with record quarterly revenues and debt repayment of $20 billion. In addition, Exxon’s colossal cash flow will allow the oil and gas company to cover capital investments and growing dividends. Since the beginning of 2022, Exxon Mobil shares have increased by 34.65%, while after the quarterly report on February 1, they added +8.5%.
Is it worth buying shares of the oil and gas giant, given this growth since the day of the report?
Some Wall Street analysts think it’s worth it. Last week, Argus analyst Bill Seleski upgraded the rating of Exxon Mobil shares from “hold” to “buy,” indicating a target price of $92 against the closing price on Monday, February 7, at $82.39.The analyst highlighted Exxon Mobil’s strong results in the fourth quarter of 2021 and the company’s long-term prospects.
A vital price level of $81 per Exxon share indicates that the stakes are ready for further growth. Although Exxon Mobil’s stock price also traded at $81 in 2017, this price point has been a stubborn resistance level for a long time, and it looks like XOM shares may be ready to break through it.
At the same time, the price-to-earnings ratio of Exxon Mobil over the past 12 months is slightly below 15, which suggests these shares today.
Exxon Mobil has significantly improved its cash balance in 2021.
Analysts and investors see increasing potential for Exxon Mobil, especially given the increase in dividends, share buybacks, and further debt repayment this year.
The company reported a profit of $8.87 billion, significantly better than a loss of $20 billion in the fourth quarter of 2020. Quarterly revenue and profit statistics on the Exxon Mobil reports page.
At the end of last year, Exxon earned $23 billion in profit compared to losses of $22.44 billion in 2020. At the same time, capital expenditures and exploration costs decreased from $21.37 billion—up to $16.6 billion, which means almost $5 billion in savings.
On top of that, Exxon Mobil has returned its balance sheet to pre-COVID-19 levels, paying off $20 billion in debt in 2021. Exxon Mobil’s further capital investments debt reduction and dividend payments.
In addition, Exxon’s profit growth allows you to buy back shares and increase dividends. As of early February 2022, Exxon Mobil offered a forward annual dividend yield of 4.32%. The company has consistently increased its annual dividends for 39 years.
In the first quarter of 2022, the company launched a previously announced share buyback worth up to $10 billion, which will continue over the next 12-24 months, increasing its value to shareholders.
The company expects to implement plans to reduce emissions by 2025, four years ahead of schedule. At the same time, Exxon reiterated its intention to achieve zero greenhouse gas emissions of categories 1 and 2 for operating assets by 2050 and achieve zero emissions in the Permian Basin by 2030.
The company’s strong performance will allow it to follow its plans in a disciplined manner. The oil company announced that it would reorganize into three business units on April 1. it will merge chemical and oil refining divisions into a single reporting segment to reduce costs following the new structure.
The transition of Exxon Mobil to a greener business model is a long-term plan for the company. Still, given the solid financial statistics, it can become a critical factor in the continued success of Exxon Mobil and be an argument for holding this stock for years.
