Yahoo Finance Why Exxon Mobil (XOM) is a Top Value Stock for the Long-Term
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.
Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.
Why Investors Should Pay Attention to This Value Stock
Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.
Exxon Mobil (XOM)
ExxonMobil's bellwether status in the energy space, optimal integrated capital structure that has historically produced industry-leading returns and management's track record of capex discipline across the commodity price cycle make it a relatively lower-risk energy sector play.
The company's upstream portfolio has not generated much production growth in 2019 and the trend isn't expected to change at least in the near term. It nevertheless owns some of the most prolific upstream assets globally. Other aspects of the company's story include the largest global refining operations, substantial chemicals assets and a dividend history and credit profile that are second to none in the space.
As compared to other energy giants, ExxonMobil's capital spending discipline is quite aggressive. The company has a plan in place to allocate significant proportion of its budget to key oil and gas projects that include offshore Guyana resources and Permian - the most prolific shale play in the United States.
Needless to say, the company's business perspective looks different from most peers since big oil rivals have pledged to lower carbon emissions to tackle climate change.
XOM is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of B. Shares are currently trading at a forward P/E of 12.5X for the current fiscal year compared to the Oil and Gas - Integrated - International industry's P/E of 7.3X. Additionally, XOM has a PEG Ratio of 4.2 and a Price/Cash Flow ratio of 8.1X. Value investors should also note XOM's Price/Sales ratio of 1.4X.
Many value investors pay close attention to a company's earnings as well. For XOM, six analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.55 to $9.70 per share for 2024. Per share XOM boasts an average earnings surprise of 3.1%.
With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding XOM to their portfolios.
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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
