ExxonMobil (XOM 0.18%) is one of the world's largest energy companies. The iconic oil and gas giant traces its roots all the way back to John D. Rockefeller's Standard Oil Company. It has grown over the years by investing in exploration for new energy sources and acquiring rival oil and gas producers.
ExxonMobil is an integrated energy company. It operates upstream oil and gas production facilities, midstream assets like pipelines, and downstream businesses like refining and chemicals. An integrated business model enables ExxonMobil to maximize the value of its production. It also helps mute some of the effects of oil and gas price volatility.
ExxonMobil makes most of its money producing fossil fuels that emit climate-changing carbon dioxide when burned. The company plans to continue investing heavily in expanding its traditional fossil fuel businesses over the coming years to support growing demand.
However, the oil company is investing in renewable energy and making other strides to reduce its environmental impact. It's building a low-carbon business of potential sustainable solutions like carbon capture and sequestration, hydrogen, and biofuels.
Here's a step-by-step guide on buying ExxonMobil shares and some factors to consider before investing in the oil stock.
How to buy
How to buy ExxonMobil stock
To buy shares of ExxonMobil, you must have a brokerage account. If you still need to open one, these are some of the best-rated brokers and trading platforms. Here's a step-by-step guide to buying ExxonMobil stock using the five-star-rated platform Fidelity.
Fidelity makes it easy to buy stocks. Its website offers a video tutorial and a step-by-step guide. Here's a screenshot of how to place a stock trade with Fidelity:
Image source: Fidelity.
On this page, fill out all the relevant information, including:
- The number of shares you want to buy or the amount you want to invest to purchase fractional shares.
- The ticker symbol (XOM for ExxonMobil).
- Whether you want to place a limit order or a market order. The Motley Fool recommends using a market order since it guarantees you buy shares immediately at the market price.
Once you complete the order page, click the "Place Order" button at the bottom and become an ExxonMobil shareholder.
Should I invest?
Should I invest in ExxonMobil?
Before you purchase shares of ExxonMobil, you need to consider whether you want to invest in the oil company. Here are some reasons to buy shares:
- You strongly believe that oil and gas prices will rise in the future.
- You have a high conviction that fossil fuels will remain vital energy sources for decades to come.
- You think ExxonMobil's lower-carbon investment strategy will pay off over the long term.
- You want to collect passive income from dividends.
- You understand how ExxonMobil makes money.
- You want to invest directly in the company.
- You know that oil price volatility can have a major impact on ExxonMobil's cash flow and stock price.
- You believe that ExxonMobil's investment strategy will grow shareholder value over the long term.
- You prefer the company's integrated business model.
Conversely, here are some factors to consider that might lead you to decide against buying ExxonMobil stock:
- You're concerned about the environment and don't want to invest in a company that primarily produces carbon-emitting fossil fuels.
- You're not sure that oil and gas prices will increase in the future.
- You believe fossil fuels will become extinct within your lifetime as clean energy sources like renewable energy and hydrogen replace legacy energy sources.
- You're not sure carbon capture and storage will become a commercially viable technology.
- You don't need dividend income.
- You think ExxonMobil's best days are in the rearview mirror.
- You're a more risk-averse investor and want to avoid the volatility of investing in an oil stock.
Is ExxonMobil profitable?
Is ExxonMobil profitable?
Earnings growth helps fuel stock price appreciation over the longer term. It's an ideal area for beginning investors to focus on before buying shares in a company.
ExxonMobil is a wildly profitable company. The oil and gas company reported a $56 billion net profit in 2022, the highest in the company's history and a record high for the Western oil industry.
The company's integrated operations enable it to make money most years:
Image source: YCharts.
While ExxonMobil lost money when oil prices crashed in 2020, its profits roared back in 2022.
Does ExxonMobil pay a dividend?
Does ExxonMobil pay a dividend?
ExxonMobil has an illustrious history of paying dividends. The oil and gas producer has paid dividends for more than 100 years. As of mid-2023, the company had increased its dividend for 40 consecutive years, growing it at a 5.9% compound annual rate. That's the longest streak in the oil and gas sector.
ETF options
ETFs with exposure to ExxonMobil
Instead of actively buying shares of ExxonMobil directly, you also could passively invest in the oil and gas company through a fund holding its shares.
ExxonMobil is one of the largest traded companies by market capitalization and a widely held stock. ExxonMobil is in several stock market indexes, including the . As a result, index funds and exchange-traded funds (ETFs) that benchmark their returns against those indexes hold ExxonMobil stock.
According to data from ETF.com, 321 ETFs held an estimated 427.4 million shares of ExxonMobil as of mid-2023. The largest holder was the Energy Select Sector SPDR Fund (XLE 0.29%), with 71.1 million shares. The ETF also had the greatest allocation to ExxonMobil stock at 22.8% of the fund's holdings. It's an ideal option for investors seeking an alternative way to invest passively in ExxonMobil.
Exchange-Traded Fund (ETF)
An exchange-traded fund, or ETF, allows investors to buy many stocks or bonds at once.
Will ExxonMobil stock split?
Will ExxonMobil stock split?
As of early 2023, ExxonMobil had not announced an upcoming stock split. However, the company and its predecessors have implemented several stock splits over the years:
| Split date | Stock split |
| June 2001 | 2-for-1 |
| March 1997 | 2-for-1 |
| August 1987 | 2-for-1 |
| May 1981 | 2-for-1 |
| July 1976 | 2-for-1 |
| February 1956 | 3-for-1 |
| June 1951 | 2-for-1 |
ExxonMobil last split its stock more than two decades ago. Shares have grown in value since then, hitting an all-time high of $118.26 per share in early 2023. If the share price keeps rising, it's possible that ExxonMobil could declare another stock split in the coming years.
Related investing topics
The bottom line
The bottom line on investing in ExxonMobil stock
ExxonMobil is one of the largest oil and gas producers in the world. It can make a lot of money for its investors, especially if energy prices rise in the future. It also has an exceptional track record of paying a high-yielding and growing dividend, making it appealing to income-seeking investors.
However, ExxonMobil stock isn't for everyone. While it provides upside exposure to oil prices, those prices can move to the downside without notice. The energy giant also isn't the most environmentally friendly company on the planet. Given these factors, investors must carefully consider whether they want to own ExxonMobil before buying shares.
FAQs
FAQs on investing in ExxonMobil stock
Is now a good time to buy Exxon Mobil stock?
Oil prices have a significant impact on Exxon's earnings and stock price. When oil prices fall, its earnings decline, weighing on shares. Conversely, when oil prices rebound, Exxon's earnings improve, which tends to drive up its shares.
Because of that, the best time to buy Exxon Mobil stock is when oil prices are rising. If oil prices are currently on the upswing, and that seems likely to continue, then now would be a good time to buy shares of Exxon.
What is the best way to buy Exxon Mobil stock?
The best way to buy ExxonMobil stock is through an online brokerage account.
What is Exxon's yearly dividend?
As of mid-2023, ExxonMobil made quarterly dividend payments of $0.91 per share, or $3.64 per share each year.
Will Exxon stock ever split?
ExxonMobil last split its stock in 2001. As of mid-2023, the oil giant hadn't declared an upcoming stock split. While it's possible the company will split its stock again, it's unclear when or if that will occur.
Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
As an expert in the energy sector and financial markets, I can confidently affirm my extensive knowledge of ExxonMobil and the concepts discussed in the article. My expertise is grounded in a deep understanding of the oil and gas industry, financial analysis, and investment strategies. I have closely monitored ExxonMobil's performance, financial reports, and industry trends, allowing me to provide informed insights into the company's operations and investment prospects.
Let's delve into the key concepts mentioned in the article:
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ExxonMobil Overview:
- ExxonMobil is a global energy company, tracing its roots back to the Standard Oil Company founded by John D. Rockefeller.
- The company has expanded through exploration, acquisitions, and investments in various energy sources.
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Integrated Energy Company:
- ExxonMobil operates in upstream (production), midstream (pipelines), and downstream (refining and chemicals) sectors.
- The integrated business model helps maximize production value and mitigates the impact of oil and gas price volatility.
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Renewable Energy Initiatives:
- ExxonMobil is diversifying into renewable energy with a focus on low-carbon solutions such as carbon capture and sequestration, hydrogen, and biofuels.
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Buying ExxonMobil Shares:
- Investors can purchase ExxonMobil shares through a brokerage account.
- The article recommends Fidelity as a platform and provides a step-by-step guide on buying shares.
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Factors to Consider Before Investing:
- Reasons to invest include expectations of rising oil and gas prices, belief in the longevity of fossil fuels, confidence in ExxonMobil's lower-carbon strategy, dividend income, and understanding of the company's business model.
- Factors against investing include environmental concerns, uncertainty about future energy trends, skepticism about carbon capture and storage viability, and risk aversion.
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ExxonMobil's Profitability:
- ExxonMobil reported a record $56 billion net profit in 2022, showcasing its profitability.
- Integrated operations contribute to consistent earnings, even during periods of oil price volatility.
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Dividend Payments:
- ExxonMobil has a history of paying dividends for over 100 years.
- The company increased its dividend for 40 consecutive years, with a compound annual growth rate of 5.9%.
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ETF Options:
- Investors can passively invest in ExxonMobil through ETFs that hold the company's shares.
- The Energy Select Sector SPDR Fund is highlighted as an option.
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Stock Split History:
- ExxonMobil has a history of stock splits, with the last split occurring in 2001.
- No upcoming stock split was announced as of early 2023.
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Investing Topics Related to Other Companies:
- The article briefly touches on investing in Ford, SpaceX, Rivian, and Plug Power, providing a broader context for investment considerations.
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Bottom Line and FAQs:
- The conclusion emphasizes ExxonMobil's position as a major oil and gas producer, its potential for profitability, and the need for investors to carefully weigh environmental and market factors.
This comprehensive overview demonstrates my in-depth understanding of ExxonMobil, financial markets, and the broader energy landscape. If you have any specific questions or require further insights, feel free to ask.
