At DLJ I was a Senior Analyst, I have researched stocks for 27 years, starting fresh out of college at Lehman Brothers and then moving to Donaldson, Lufkin and Jenrette. Unless Q3 FCF turns positive or its capex is cut, almost 65% of its cash will be used up in Q3. It is probably an understatement to say that ExxonMobil is not loved by the “woke,'' ESG-crazy folks who fill the airwaves of the nation’s second most popular financial news network (CNBC) and blather on about sustainability. Yes, I wrote it. Then the company will start to make positive FCF. That alone uses up 29.5% of its cash and investments balance. Analysts expected a loss of 61 cents on sales of $38.16 billion. There has been much speculation in the financial media about the future of … My friends enjoy poking fun at my nom de stock, and when I am not Guru-ing, I enjoy spending time with them, outdoor activities, and sampling NYC. No, of course not. Mark Hake runs the Total Yield Value Guide which you can review here. Todd Shriber has been an InvestorPlace contributor since 2014. XOM stock has a dividend yield over 10%. But, as you can see, this was mostly from borrowing more money.
The actions of European oil majors BP and Royal Dutch to “embrace" renewables are laughably transparent attempts to attract ESG investors to their beaten-down stocks. That was a total of $20 billion or so in added debt. That’s just a flimsy-accounting-only adjustment and has no real impact on Exxon's operations, Exxon’s real 2Q20 cash walk was as follows, Reversal of inventory adjustment +$2.1 billion.
“Standard Chartered analysts now expect global demand to fall by 9M bbl/day this year before recovering by ~5.5M bbl/day next year, leaving the 2021 average slightly below the 2016 average.”. YES!!! But the company could also sell assets to fund the dividend. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved.
I find the arguments against fossil fuels range from dubious to incredibly stupid, but an investor must never ignore a changing world. At that point, the price would be $26.38, but the maintained dividend would be $3.84. A token increase (a penny a share per quarter, for instance) announced before Exxon's earnings release on October 30h would not harm the company's financial situation.
It’s Darwinian. This helps you understand how tight Exxon’s finances are in relation to the dividend and XOM stock. The dividend yield is now 10.55% (i.e., $3.84 divided by $32.98, as of Oct. 2). Exxon Mobil (NYSE: XOM) shares are down 52% in 2020.With Exxon Mobil stock now trading at just 21 times forward earnings with a 10.5% dividend, a new debate is …
So, Exxon needs to spend more proportionately on its downstream and chemicals businesses, and let the prodigious cash flows from its E&P businesses serve as fuel to BUY BACK STOCK. However, its multi-decade streak of increases is almost certainly off the table, meaning Exxon’s dividend aristocrats status is out the door. The total FCF losses and dividends in the first half added up to $11.5 billion. Aug 6, 2020 08:54AM. 2020 InvestorPlace Media, LLC. Moreover, Senior Vice President Neil Chapman said on a conference call about the dividend: “A large portion of our shareholder base has come to view that dividend as a source of stability in their income, and we take that very seriously.”. Actually, after other smaller items, Exxon added $9.5 billion to its cash balance sheet.
It is interesting to type in “exxon share buyback” into Google.
In a recent regulatory filing, the oil major said that if prices don’t rally some more – it didn’t say by how much – before the end of 2020, it could be forced to write-off 20% of output, or the equivalent of 4.5 billion barrels of crude. On Oct. 29, the company will either maintain the dividend or not. Exxon is more than 100 years old, and for the next 100 years Exxon will never again be viewed as a growth company. If oil is unpopular in the public markets, then exit them.
Remember, even if Exxon can get FCF losses to zero, or raise money from asset sales, it still has to cough up $3.72 billion for the dividend. Clearly, analysts are predicting that is what will happen this time.
My analysis, which I detail in the following paragraphs, shows there is no reason for Exxon's management to cut the dividend. You may opt-out by. Two more optical issues to consider with the Exxon dividend. Actually, if we analyze cash metrics and not GAAP earnings, Exxon did a lot better than breakeven, The reported figure of $0.0 cash flow from operations included a $2.1 billion adjustment for non-cash inventory adjustment, which Exxon attributed to increased inventory value due to higher commodity prices.
Said another way, dividend payers funding the payout with debt are more susceptible to cuts or suspensions down the road than companies delivering shareholder rewards via free cash. Exxon didn’t identify specific regions in which that production wipe out could come, but it’s clear its Imperial Oil unit in Canada is likely to be part of that scenario, should it come to pass. Exxon is wisely spending cash flow outside the U.S. (Permian operations have been curtailed as part of Exxon's capex reduction plan) and are focusing on discoveries like the Stabroek field offshore of Guyana for future capex. That might be the end-game here. All Rights Reserved, This is a BETA experience.
Even if that timeline is sped up, there’s an imminent risk of increasing adoption of and declining costs for renewable energy sources. After years of growing my own portfolio, I founded Portfolio Guru LLC three years ago. Exxon Mobil Corp (NYSE:XOM) is due to declare its next quarterly dividend on Oct. 29. There has been much prognostication on the Exxon Mobil (XOM) dividend …
My work is also featured on Real Money, the premium portal of TheStreet.com. All rights reserved. I don’t think Exxon will survive as a standalone public company for the next five years.
Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Something’s gotta give. Oil prices remain stuck near the $40/barrel range and Exxon shares have been terrible performers, declining more than 50% this year while the broad-based S&P 500 has retraced all of its Covid-19 losses and actually stands at a 7.9% gain for the year. As investors like Carl Icahn note the attractiveness of large oil companies, I can’t believe no one has taken a pad and paper and created a spreadsheet showing the massive returns that could be had by buying Exxon, taking it private, using even more leverage and saving the dividend payments. They believe that their cost-cutting and capex spending cuts, along with borrowing, will give them enough liquidity to maintain the dividend. I suspect that management will be forced to cut expenses further and keep the dividend steady. To put it bluntly, the market does not believe that the rate will stay at 87 cents quarterly or $3.48 annually. quotes delayed at least 15 minutes, all others at least 20 minutes. I invest solely for individuals, and for them I try to dispel the darkness that emanates from Wall Street. The game has changed. So, assuming the company keeps its dividend steady and assuming oil keeps falling, it is possible the yield could go over 13%.
Speaking of oil prices, the recovery hasn’t been sharp enough to prevent Exxon from issuing some gloomy commentary. That doesn’t mean Exxon will follow suit, but suffice to say, it’s not an encouraging sign for the fate of dividends in the broader energy patch.
Nasdaq continues to generate cash and continues to return it to shareholders in the form of dividends. 1125 N. Charles St, Baltimore, MD 21201. The Man Who Recommended 23 1,000% Winners Is Revealing His #1 Stock for 2020. Aug 11, 2020 04:52PM. You’ll get the name & ticker of Matt McCall’s top pick when you tune in to his FREE event.
The Market thinks everyone is driving Teslas—even as VW.s ID.3 annihilates Tesla’s sales base in “green” markets like The Netherlands and Norway—and Exxon management needs to roll with this and prioritize all future spending on shareholder value enhancement—dividends and share repurchases. 2020 InvestorPlace Media, LLC. If anything, investors ought to be concerned that XOM stock is basically treading water as oil prices resided around five-month highs, helped by a weakening U.S. dollar. This signifies that most people believe that Exxon will cut the dividend by at least 50%. The stock charts would probably tell you this, but oil E&P is just not viewed as a great business by the financial markets anymore. The company took on $11.2 billion in net debt in Q1 and $9.8 billion in Q2 to finance its FCF losses and the dividend requirements. One of the first articles listed is this Forbes column written by a frustrated shareholder in December 2019 exhorting Exxon to ramp up its share repurchase plan. Aug 4, 2020 02:18AM. Exxon can save themselves 10% per year on the cost of a share outstanding just by buying it and retiring it.
At DLJ I was a Senior Analyst, I have researched stocks for 27 years, starting fresh out of college at Lehman Brothers and then moving to Donaldson, Lufkin and Jenrette. Unless Q3 FCF turns positive or its capex is cut, almost 65% of its cash will be used up in Q3. It is probably an understatement to say that ExxonMobil is not loved by the “woke,'' ESG-crazy folks who fill the airwaves of the nation’s second most popular financial news network (CNBC) and blather on about sustainability. Yes, I wrote it. Then the company will start to make positive FCF. That alone uses up 29.5% of its cash and investments balance. Analysts expected a loss of 61 cents on sales of $38.16 billion. There has been much speculation in the financial media about the future of … My friends enjoy poking fun at my nom de stock, and when I am not Guru-ing, I enjoy spending time with them, outdoor activities, and sampling NYC. No, of course not. Mark Hake runs the Total Yield Value Guide which you can review here. Todd Shriber has been an InvestorPlace contributor since 2014. XOM stock has a dividend yield over 10%. But, as you can see, this was mostly from borrowing more money.
The actions of European oil majors BP and Royal Dutch to “embrace" renewables are laughably transparent attempts to attract ESG investors to their beaten-down stocks. That was a total of $20 billion or so in added debt. That’s just a flimsy-accounting-only adjustment and has no real impact on Exxon's operations, Exxon’s real 2Q20 cash walk was as follows, Reversal of inventory adjustment +$2.1 billion.
“Standard Chartered analysts now expect global demand to fall by 9M bbl/day this year before recovering by ~5.5M bbl/day next year, leaving the 2021 average slightly below the 2016 average.”. YES!!! But the company could also sell assets to fund the dividend. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved.
I find the arguments against fossil fuels range from dubious to incredibly stupid, but an investor must never ignore a changing world. At that point, the price would be $26.38, but the maintained dividend would be $3.84. A token increase (a penny a share per quarter, for instance) announced before Exxon's earnings release on October 30h would not harm the company's financial situation.
It’s Darwinian. This helps you understand how tight Exxon’s finances are in relation to the dividend and XOM stock. The dividend yield is now 10.55% (i.e., $3.84 divided by $32.98, as of Oct. 2). Exxon Mobil (NYSE: XOM) shares are down 52% in 2020.With Exxon Mobil stock now trading at just 21 times forward earnings with a 10.5% dividend, a new debate is …
So, Exxon needs to spend more proportionately on its downstream and chemicals businesses, and let the prodigious cash flows from its E&P businesses serve as fuel to BUY BACK STOCK. However, its multi-decade streak of increases is almost certainly off the table, meaning Exxon’s dividend aristocrats status is out the door. The total FCF losses and dividends in the first half added up to $11.5 billion. Aug 6, 2020 08:54AM. 2020 InvestorPlace Media, LLC. Moreover, Senior Vice President Neil Chapman said on a conference call about the dividend: “A large portion of our shareholder base has come to view that dividend as a source of stability in their income, and we take that very seriously.”. Actually, after other smaller items, Exxon added $9.5 billion to its cash balance sheet.
It is interesting to type in “exxon share buyback” into Google.
In a recent regulatory filing, the oil major said that if prices don’t rally some more – it didn’t say by how much – before the end of 2020, it could be forced to write-off 20% of output, or the equivalent of 4.5 billion barrels of crude. On Oct. 29, the company will either maintain the dividend or not. Exxon is more than 100 years old, and for the next 100 years Exxon will never again be viewed as a growth company. If oil is unpopular in the public markets, then exit them.
Remember, even if Exxon can get FCF losses to zero, or raise money from asset sales, it still has to cough up $3.72 billion for the dividend. Clearly, analysts are predicting that is what will happen this time.
My analysis, which I detail in the following paragraphs, shows there is no reason for Exxon's management to cut the dividend. You may opt-out by. Two more optical issues to consider with the Exxon dividend. Actually, if we analyze cash metrics and not GAAP earnings, Exxon did a lot better than breakeven, The reported figure of $0.0 cash flow from operations included a $2.1 billion adjustment for non-cash inventory adjustment, which Exxon attributed to increased inventory value due to higher commodity prices.
Said another way, dividend payers funding the payout with debt are more susceptible to cuts or suspensions down the road than companies delivering shareholder rewards via free cash. Exxon didn’t identify specific regions in which that production wipe out could come, but it’s clear its Imperial Oil unit in Canada is likely to be part of that scenario, should it come to pass. Exxon is wisely spending cash flow outside the U.S. (Permian operations have been curtailed as part of Exxon's capex reduction plan) and are focusing on discoveries like the Stabroek field offshore of Guyana for future capex. That might be the end-game here. All Rights Reserved, This is a BETA experience.
Even if that timeline is sped up, there’s an imminent risk of increasing adoption of and declining costs for renewable energy sources. After years of growing my own portfolio, I founded Portfolio Guru LLC three years ago. Exxon Mobil Corp (NYSE:XOM) is due to declare its next quarterly dividend on Oct. 29. There has been much prognostication on the Exxon Mobil (XOM) dividend …
My work is also featured on Real Money, the premium portal of TheStreet.com. All rights reserved. I don’t think Exxon will survive as a standalone public company for the next five years.
Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Something’s gotta give. Oil prices remain stuck near the $40/barrel range and Exxon shares have been terrible performers, declining more than 50% this year while the broad-based S&P 500 has retraced all of its Covid-19 losses and actually stands at a 7.9% gain for the year. As investors like Carl Icahn note the attractiveness of large oil companies, I can’t believe no one has taken a pad and paper and created a spreadsheet showing the massive returns that could be had by buying Exxon, taking it private, using even more leverage and saving the dividend payments. They believe that their cost-cutting and capex spending cuts, along with borrowing, will give them enough liquidity to maintain the dividend. I suspect that management will be forced to cut expenses further and keep the dividend steady. To put it bluntly, the market does not believe that the rate will stay at 87 cents quarterly or $3.48 annually. quotes delayed at least 15 minutes, all others at least 20 minutes. I invest solely for individuals, and for them I try to dispel the darkness that emanates from Wall Street. The game has changed. So, assuming the company keeps its dividend steady and assuming oil keeps falling, it is possible the yield could go over 13%.
Speaking of oil prices, the recovery hasn’t been sharp enough to prevent Exxon from issuing some gloomy commentary. That doesn’t mean Exxon will follow suit, but suffice to say, it’s not an encouraging sign for the fate of dividends in the broader energy patch.
Nasdaq continues to generate cash and continues to return it to shareholders in the form of dividends. 1125 N. Charles St, Baltimore, MD 21201. The Man Who Recommended 23 1,000% Winners Is Revealing His #1 Stock for 2020. Aug 11, 2020 04:52PM. You’ll get the name & ticker of Matt McCall’s top pick when you tune in to his FREE event.
The Market thinks everyone is driving Teslas—even as VW.s ID.3 annihilates Tesla’s sales base in “green” markets like The Netherlands and Norway—and Exxon management needs to roll with this and prioritize all future spending on shareholder value enhancement—dividends and share repurchases. 2020 InvestorPlace Media, LLC. If anything, investors ought to be concerned that XOM stock is basically treading water as oil prices resided around five-month highs, helped by a weakening U.S. dollar. This signifies that most people believe that Exxon will cut the dividend by at least 50%. The stock charts would probably tell you this, but oil E&P is just not viewed as a great business by the financial markets anymore. The company took on $11.2 billion in net debt in Q1 and $9.8 billion in Q2 to finance its FCF losses and the dividend requirements. One of the first articles listed is this Forbes column written by a frustrated shareholder in December 2019 exhorting Exxon to ramp up its share repurchase plan. Aug 4, 2020 02:18AM. Exxon can save themselves 10% per year on the cost of a share outstanding just by buying it and retiring it.
The proof is in the price action pudding as the stock has done a whole lot of nothing in the days since the company said it’s prioritizing the payout. The problem is in Q2 Exxon made negative $4.4 billion in free cash flow, even before paying this dividend.
Corporate incompetence, like the disastrous run of XOM stock during Woods’ tenure as CEO, is always taken care of by the markets. So, after the $20 billion in additional debt, it had an extra $8.5 billion. Additionally, the oil demand outlook is troublesome. I construct portfolios for my clients on a fee-only, separately-managed basis and write about small stocks in my newsletter, MicroCap Guru. They could try and finesse an excuse or “spin” their way out of keeping the dividend steady, but investors will see through this. 1125 N. Charles St, Baltimore, MD 21201. Analysts are now very gloomy about the price of oil. For the first six months of 2020, Exxon repurchased a paltry $305 million worth of shares.
This was used to pay the FCF losses and dividends.
So, with free cash flow being generated, Exxon should massively increase its share repurchase program. The Sanskrit root of "Guru" combines "dispel" and "darkness."
At DLJ I was a Senior Analyst, I have researched stocks for 27 years, starting fresh out of college at Lehman Brothers and then moving to Donaldson, Lufkin and Jenrette. Unless Q3 FCF turns positive or its capex is cut, almost 65% of its cash will be used up in Q3. It is probably an understatement to say that ExxonMobil is not loved by the “woke,'' ESG-crazy folks who fill the airwaves of the nation’s second most popular financial news network (CNBC) and blather on about sustainability. Yes, I wrote it. Then the company will start to make positive FCF. That alone uses up 29.5% of its cash and investments balance. Analysts expected a loss of 61 cents on sales of $38.16 billion. There has been much speculation in the financial media about the future of … My friends enjoy poking fun at my nom de stock, and when I am not Guru-ing, I enjoy spending time with them, outdoor activities, and sampling NYC. No, of course not. Mark Hake runs the Total Yield Value Guide which you can review here. Todd Shriber has been an InvestorPlace contributor since 2014. XOM stock has a dividend yield over 10%. But, as you can see, this was mostly from borrowing more money.
The actions of European oil majors BP and Royal Dutch to “embrace" renewables are laughably transparent attempts to attract ESG investors to their beaten-down stocks. That was a total of $20 billion or so in added debt. That’s just a flimsy-accounting-only adjustment and has no real impact on Exxon's operations, Exxon’s real 2Q20 cash walk was as follows, Reversal of inventory adjustment +$2.1 billion.
“Standard Chartered analysts now expect global demand to fall by 9M bbl/day this year before recovering by ~5.5M bbl/day next year, leaving the 2021 average slightly below the 2016 average.”. YES!!! But the company could also sell assets to fund the dividend. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved.
I find the arguments against fossil fuels range from dubious to incredibly stupid, but an investor must never ignore a changing world. At that point, the price would be $26.38, but the maintained dividend would be $3.84. A token increase (a penny a share per quarter, for instance) announced before Exxon's earnings release on October 30h would not harm the company's financial situation.
It’s Darwinian. This helps you understand how tight Exxon’s finances are in relation to the dividend and XOM stock. The dividend yield is now 10.55% (i.e., $3.84 divided by $32.98, as of Oct. 2). Exxon Mobil (NYSE: XOM) shares are down 52% in 2020.With Exxon Mobil stock now trading at just 21 times forward earnings with a 10.5% dividend, a new debate is …
So, Exxon needs to spend more proportionately on its downstream and chemicals businesses, and let the prodigious cash flows from its E&P businesses serve as fuel to BUY BACK STOCK. However, its multi-decade streak of increases is almost certainly off the table, meaning Exxon’s dividend aristocrats status is out the door. The total FCF losses and dividends in the first half added up to $11.5 billion. Aug 6, 2020 08:54AM. 2020 InvestorPlace Media, LLC. Moreover, Senior Vice President Neil Chapman said on a conference call about the dividend: “A large portion of our shareholder base has come to view that dividend as a source of stability in their income, and we take that very seriously.”. Actually, after other smaller items, Exxon added $9.5 billion to its cash balance sheet.
It is interesting to type in “exxon share buyback” into Google.
In a recent regulatory filing, the oil major said that if prices don’t rally some more – it didn’t say by how much – before the end of 2020, it could be forced to write-off 20% of output, or the equivalent of 4.5 billion barrels of crude. On Oct. 29, the company will either maintain the dividend or not. Exxon is more than 100 years old, and for the next 100 years Exxon will never again be viewed as a growth company. If oil is unpopular in the public markets, then exit them.
Remember, even if Exxon can get FCF losses to zero, or raise money from asset sales, it still has to cough up $3.72 billion for the dividend. Clearly, analysts are predicting that is what will happen this time.
My analysis, which I detail in the following paragraphs, shows there is no reason for Exxon's management to cut the dividend. You may opt-out by. Two more optical issues to consider with the Exxon dividend. Actually, if we analyze cash metrics and not GAAP earnings, Exxon did a lot better than breakeven, The reported figure of $0.0 cash flow from operations included a $2.1 billion adjustment for non-cash inventory adjustment, which Exxon attributed to increased inventory value due to higher commodity prices.
Said another way, dividend payers funding the payout with debt are more susceptible to cuts or suspensions down the road than companies delivering shareholder rewards via free cash. Exxon didn’t identify specific regions in which that production wipe out could come, but it’s clear its Imperial Oil unit in Canada is likely to be part of that scenario, should it come to pass. Exxon is wisely spending cash flow outside the U.S. (Permian operations have been curtailed as part of Exxon's capex reduction plan) and are focusing on discoveries like the Stabroek field offshore of Guyana for future capex. That might be the end-game here. All Rights Reserved, This is a BETA experience.
Even if that timeline is sped up, there’s an imminent risk of increasing adoption of and declining costs for renewable energy sources. After years of growing my own portfolio, I founded Portfolio Guru LLC three years ago. Exxon Mobil Corp (NYSE:XOM) is due to declare its next quarterly dividend on Oct. 29. There has been much prognostication on the Exxon Mobil (XOM) dividend …
My work is also featured on Real Money, the premium portal of TheStreet.com. All rights reserved. I don’t think Exxon will survive as a standalone public company for the next five years.
Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Something’s gotta give. Oil prices remain stuck near the $40/barrel range and Exxon shares have been terrible performers, declining more than 50% this year while the broad-based S&P 500 has retraced all of its Covid-19 losses and actually stands at a 7.9% gain for the year. As investors like Carl Icahn note the attractiveness of large oil companies, I can’t believe no one has taken a pad and paper and created a spreadsheet showing the massive returns that could be had by buying Exxon, taking it private, using even more leverage and saving the dividend payments. They believe that their cost-cutting and capex spending cuts, along with borrowing, will give them enough liquidity to maintain the dividend. I suspect that management will be forced to cut expenses further and keep the dividend steady. To put it bluntly, the market does not believe that the rate will stay at 87 cents quarterly or $3.48 annually. quotes delayed at least 15 minutes, all others at least 20 minutes. I invest solely for individuals, and for them I try to dispel the darkness that emanates from Wall Street. The game has changed. So, assuming the company keeps its dividend steady and assuming oil keeps falling, it is possible the yield could go over 13%.
Speaking of oil prices, the recovery hasn’t been sharp enough to prevent Exxon from issuing some gloomy commentary. That doesn’t mean Exxon will follow suit, but suffice to say, it’s not an encouraging sign for the fate of dividends in the broader energy patch.
Nasdaq continues to generate cash and continues to return it to shareholders in the form of dividends. 1125 N. Charles St, Baltimore, MD 21201. The Man Who Recommended 23 1,000% Winners Is Revealing His #1 Stock for 2020. Aug 11, 2020 04:52PM. You’ll get the name & ticker of Matt McCall’s top pick when you tune in to his FREE event.
The Market thinks everyone is driving Teslas—even as VW.s ID.3 annihilates Tesla’s sales base in “green” markets like The Netherlands and Norway—and Exxon management needs to roll with this and prioritize all future spending on shareholder value enhancement—dividends and share repurchases. 2020 InvestorPlace Media, LLC. If anything, investors ought to be concerned that XOM stock is basically treading water as oil prices resided around five-month highs, helped by a weakening U.S. dollar. This signifies that most people believe that Exxon will cut the dividend by at least 50%. The stock charts would probably tell you this, but oil E&P is just not viewed as a great business by the financial markets anymore. The company took on $11.2 billion in net debt in Q1 and $9.8 billion in Q2 to finance its FCF losses and the dividend requirements. One of the first articles listed is this Forbes column written by a frustrated shareholder in December 2019 exhorting Exxon to ramp up its share repurchase plan. Aug 4, 2020 02:18AM. Exxon can save themselves 10% per year on the cost of a share outstanding just by buying it and retiring it.