PipelinesOgre09 said:
Oil may not be fashionable like tech companies and Tesla, but it literally moves the world and will for decades to come.
And at current dividend yield, I gotta figure a cut is already factored into the price pretty well. Where else can you get 8%?
XOM
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Last: 21 days ago by MsDoubleD81
EPD
Dan Scott said:cjsag94 said:Ubitag said:
Double your money if you park your Exxon investment and forget about it
Green energy is not going to replace oil.
The world will get back on its feet, soon after the American election.
Exxon is not Enron
Then why has Exxon been such a dog for the last decade?
Lots of reasons but not because of slowing oil demand. Oil demand has consistently grown by about 2% every year this decade.
Exxon has made investments that have bit them in the butt. They bought XTO for $41B thinking Natural Gas had bottomed around 5. At the time it was a good gamble, nay gas prices were cut in half and the world was looking towards clean burning natural gas rather than coal. It also got XOM more involved in shale which they missed. We ended up producing a ton of natural gas and prices have averaged $2-3. I think XTO has still generated 0 income in 10 years.
The Russian investment was total loss because of the sanctions. XOM basically had exclusivity among to explore with Russian oil company.
When Saudis tried to maintain market share in 2014 by flooding the market, that made their expensive Canadian oil less profitable and they wrote down the reserves. At the same time major projects where CVX was the operator like Gorgon and Kazakhstan have gone way over budget.
Then XOM got punished more investing counter-cynically with the idea that while prices low, invest and by the time projects done, prices rise because nobody else is investing. Wallstreet wanted more stock buybacks like CVX, RDS, and COP had announced.
And then you had COVID.
Anything that could go wrong has gone wrong. It's not because of oil demand slowing, except until recently with COVID.
Actually feel bad for Darren Woods. You can't prepare for a pandemic and price war occurring at the same time.
Agree with this type of info. Mine was more of a rhetorical question to the poster who thinks simply because we EVs won't rule the world, then XOM is a good investment. As you've pointed out, there is far more to it. And XOM has not performed.
This thread is amazing to me. The love for this great dividend, but total disregard to why the yield is so high (extreme share price decline). Even Bocephus has gone MIA in this discussion, which I'm starting to think he's a bit of a troll looking at some of his other threads.
Chiming in. I can't imagine why you would invest in Exxon today when there are much better options/industries. That juicy dividend will be cut.
I agree there. Oil won't recover until after 2021. We're going into flu season and COVID numbers are increasing again in Europe. Israel went back into a shutdown this week and South America is a disaster. Argentina has been shutdown this entire time, but their cases and death keep climbing.
Refining is super weak. The positive is that chemicals are doing better with PE demand up. So if you're looking for dividend with a solid company, I like LYB a lot. - Full disclose I own shares. LYB dividend is 5.60% and they still have positive cash flow.
Except for CVX/NBL, I do think it's interesting there is no major acquisition yet. I think when we start seeing those that's a signal for bottom.
Refining is super weak. The positive is that chemicals are doing better with PE demand up. So if you're looking for dividend with a solid company, I like LYB a lot. - Full disclose I own shares. LYB dividend is 5.60% and they still have positive cash flow.
Except for CVX/NBL, I do think it's interesting there is no major acquisition yet. I think when we start seeing those that's a signal for bottom.
Oxydarko?
It is interesting that CVX has been shopping for acquisitions and XOM hasn't. I think that was because XOM was focusing on maintaining their capex and growing organically. I wonder if that will change now?
It is interesting that CVX has been shopping for acquisitions and XOM hasn't. I think that was because XOM was focusing on maintaining their capex and growing organically. I wonder if that will change now?
DId something just happen? All the oil stocks I follow just had a decent volume spike and price jumped.
Oxy paid a premium for Anadarko, which isn't indicative of the current market.
Exxon made a huge acquisition of XTO about 10 years ago. Wouldn't expect them to have another anytime soon, but I imagine their M&A team is always shopping a good fit.
Exxon made a huge acquisition of XTO about 10 years ago. Wouldn't expect them to have another anytime soon, but I imagine their M&A team is always shopping a good fit.
Ogre09 said:
Oil may not be fashionable like tech companies and Tesla, but it literally moves the world and will for decades to come.
And at current dividend yield, I gotta figure a cut is already factored into the price pretty well. Where else can you get 8%?
The world is also built from steel, but what has been the historic return on U.S. steelmakers over the last half century? Hydrocarbons sure look to be heading towards a "demanded but not valued" territory due to abundant supply, international competition, and yes, new hotness from renewables.
That doesn't mean there isn't a profit to still be made in O&G and energy.
Non cash impaired ceiling test write downs are gonna kill XOM - everyone else took the medicine already. Now you're gonna get asset impairments plus dividend cut - look out below...
True, but when you factored one wacc into the equation and the end up with a very different wacc - what was profitable now won't keep you afloat.
We get it - you hate oil and gas.
Ceiling test write down?JustPanda said:
Non cash impaired ceiling test write downs are gonna kill XOM - everyone else took the medicine already. Now you're gonna get asset impairments plus dividend cut - look out below...
cjsag94 said:Dan Scott said:cjsag94 said:Ubitag said:
Double your money if you park your Exxon investment and forget about it
Green energy is not going to replace oil.
The world will get back on its feet, soon after the American election.
Exxon is not Enron
Then why has Exxon been such a dog for the last decade?
Lots of reasons but not because of slowing oil demand. Oil demand has consistently grown by about 2% every year this decade.
Exxon has made investments that have bit them in the butt. They bought XTO for $41B thinking Natural Gas had bottomed around 5. At the time it was a good gamble, nay gas prices were cut in half and the world was looking towards clean burning natural gas rather than coal. It also got XOM more involved in shale which they missed. We ended up producing a ton of natural gas and prices have averaged $2-3. I think XTO has still generated 0 income in 10 years.
The Russian investment was total loss because of the sanctions. XOM basically had exclusivity among to explore with Russian oil company.
When Saudis tried to maintain market share in 2014 by flooding the market, that made their expensive Canadian oil less profitable and they wrote down the reserves. At the same time major projects where CVX was the operator like Gorgon and Kazakhstan have gone way over budget.
Then XOM got punished more investing counter-cynically with the idea that while prices low, invest and by the time projects done, prices rise because nobody else is investing. Wallstreet wanted more stock buybacks like CVX, RDS, and COP had announced.
And then you had COVID.
Anything that could go wrong has gone wrong. It's not because of oil demand slowing, except until recently with COVID.
Actually feel bad for Darren Woods. You can't prepare for a pandemic and price war occurring at the same time.
Agree with this type of info. Mine was more of a rhetorical question to the poster who thinks simply because we EVs won't rule the world, then XOM is a good investment. As you've pointed out, there is far more to it. And XOM has not performed.
This thread is amazing to me. The love for this great dividend, but total disregard to why the yield is so high (extreme share price decline). Even Bocephus has gone MIA in this discussion, which I'm starting to think he's a bit of a troll looking at some of his other threads.
Bought more today at 36.74. Been buying more over the past couple of weeks since it dipped under 40. No one will convince me it won't be back at 42 within a month. It will be back in the 60s in a couple of years.
TAMU ‘98 Ole Miss ‘21
Not true - EPD has been a long time holding.
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How long do you want to ignore this user?
I have no investment in XOM and I think the downside price risk if dividend is cut is enough to scare me off from the upside. I think I find better investments elsewhere. That said, I don't understand the folks on this thread with 50+ posts continuing to bag on XOM. I'm not sure if you are short XOM, are with a competitor and just want to watch the top dog burn, or if for you this is simply internet message board arguing over nothing for weeks. I guess it doesn't really matter either way, just seems odd.
"this is simply internet message board arguing over nothing for weeks"
Take that out of all these boards and there's not much left.. especially these days. And I'd sure rather harmlessly spar over this than most other topics of the day.
Take that out of all these boards and there's not much left.. especially these days. And I'd sure rather harmlessly spar over this than most other topics of the day.
XOM is successful effortsJustPanda said:
https://www.investopedia.com/ask/answers/09/oil-company-reserves-balance-sheet.asp
Approaching $36 right now. Dividend cuts or labor cuts gonna have to happen.
I guess that would depend on why it's approaching 36.Cromagnum said:
Approaching $36 right now. Dividend cuts or labor cuts gonna have to happen.
GE said:I guess that would depend on why it's approaching 36.Cromagnum said:
Approaching $36 right now. Dividend cuts or labor cuts gonna have to happen.
They have been taking on debt to cover dividends since the interest rates have been low. Cant keep that up forever.
How are you distinguishing debt to cover dividend vs. fund capital program?Cromagnum said:They have been taking on debt to cover dividends since the interest rates have been low. Cant keep that up forever.GE said:I guess that would depend on why it's approaching 36.Cromagnum said:
Approaching $36 right now. Dividend cuts or labor cuts gonna have to happen.
GE said:How are you distinguishing debt to cover dividend vs. fund capital program?Cromagnum said:They have been taking on debt to cover dividends since the interest rates have been low. Cant keep that up forever.GE said:I guess that would depend on why it's approaching 36.Cromagnum said:
Approaching $36 right now. Dividend cuts or labor cuts gonna have to happen.
Look at their 2019 statement of cash flows.
Net Cash From Operations:
2018 - $36 billion
2019 - $30 billion
CAPEX Spending:
2018 - ($20 billion)
2019 - ($24 billion)
Dividend Payments:
2018 - ($14 billion)
2019 - ($15 billion)
New Long Term Debt Issued:
2018 - $0 billion
2019 - $7 billion
In 2018, XOM could cover their CAPEX + dividends with cash from operations. In 2019, they couldn't and they took on debt. How do we distinguish whether those specific dollars funded CAPEX or dividends? We don't - cash is cash. But given that CAPEX is essential to sustain cash from operations (dividends aren't) and XOM could have covered their CAPEX without new long-term debt, I think we can surmise XOM borrowed to cover their dividend.
It depends on how you look at it. I would surmise that return of previously accumulated earnings generated through previous capital investment to owners is a primary objective of such a mature company.TriAg2010 said:GE said:How are you distinguishing debt to cover dividend vs. fund capital program?Cromagnum said:They have been taking on debt to cover dividends since the interest rates have been low. Cant keep that up forever.GE said:I guess that would depend on why it's approaching 36.Cromagnum said:
Approaching $36 right now. Dividend cuts or labor cuts gonna have to happen.
Look at their 2019 statement of cash flows.
Net Cash From Operations:
2018 - $36 billion
2019 - $30 billion
CAPEX Spending:
2018 - ($20 billion)
2019 - ($24 billion)
Dividend Payments:
2018 - ($14 billion)
2019 - ($15 billion)
New Long Term Debt Issued:
2018 - $0 billion
2019 - $7 billion
In 2018, XOM could cover their CAPEX + dividends with cash from operations. In 2019, they couldn't and they took on debt. How do we distinguish whether those specific dollars funded CAPEX or dividends? We don't - cash is cash. But given that CAPEX is essential to sustain cash from operations (dividends aren't) and XOM could have covered their CAPEX without new long-term debt, I think we can surmise XOM borrowed to cover their dividend.
Taking on additional debt wouldn't have occurred unless the capital programs that the debt was funding would have a sufficient return. Also if you look into the components of the $7 billion shortfall, it's not a result of decrease in volume or capacity, just price. Your return on capital in chemical and downstream segments just got smashed in '19 compared to '18. That's probably going to hold in 2020 but it doesnt seem to me that the fundamentals would support it holding much into the future. Pg. 36 and 37 of the 10-K do a good job showing this.
It's a capitalist market place. Bottom line, the broad market clearly doesn't like where XOM has been for the past decade, and especially where it is right now.
For those rationalizing the future stock price based on historical factors, I truly hope you win. But for the stock to rise, you have to have lots of new money agree with you and come in and start buying. An $0.87 dividend payment followed by a $2 share price decline isn't a trajectory I'd like to ride.
For those rationalizing the future stock price based on historical factors, I truly hope you win. But for the stock to rise, you have to have lots of new money agree with you and come in and start buying. An $0.87 dividend payment followed by a $2 share price decline isn't a trajectory I'd like to ride.
The Fed keeping rates at 0 until 2024 and targeting inflation over 2% will lift oil prices.
Its not like ExxonMobil is going away. Those higher prices will be right back in the near future.
I'm sure people said that about GM, GE, Rockwell, IBM, Boeing, US Steel, Xerox, Sears, RCA, Bethlehem Steel, Kodak
Ouch
Still dropping like a dog....watch out below!
I know...I'm constantly trying to figure out if I should start unloading to cut losses...? My overall cost basis is embarrassingly high.
I'll just keep buying
TAMU ‘98 Ole Miss ‘21
Couldn't we just purchase a VDE or some other industry ETF with the assumption that the US will still be in the oil / gas space, and long term demand won't fall off that badly?1876er said:
I'm sure people said that about GM, GE, Rockwell, IBM, Boeing, US Steel, Xerox, Sears, RCA, Bethlehem Steel, Kodak
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