2019 and 2020 weren’t good for Exxon Mobil (NYSE: XOM)… or the remainder of the oil trade.
Oil costs plummeted, famously turning destructive for a quick second. Consequently, oil firms’ free money stream evaporated.
Exxon’s free money stream fell by two-thirds in 2019 and was a horrific destructive $2.6 billion in 2020. Nonetheless, oil costs have since reversed and Exxon’s free money stream has rebounded strongly.
This 12 months, Exxon’s free money stream is projected to slide to $44.4 billion, a marked decline from final 12 months’s $58.4 billion however nonetheless sharply above the 2021 whole.
Importantly, the corporate paid $14.9 billion in dividends in 2022, for a payout ratio of simply 26%. This 12 months, based mostly on the $44.4 billion in predicted free money stream, the payout ratio is estimated to be simply 34%. Whereas that could be a significant bounce from final 12 months’s, it stays properly inside my consolation stage. I wish to see firms pay 75% or much less of their free money stream in dividends.
4 A long time and Counting
Exxon’s present quarterly dividend is $0.91 per share, giving it a 3.2% yield. It has raised its dividend yearly for 40 years.
It has by no means minimize its dividend because it started paying one in 1911. How’s that for a formidable dividend-paying historical past?
Regardless of free money stream that’s forecast to say no this 12 months, contemplating Exxon has by no means diminished its dividend in additional than 100 years of paying one and free money stream will simply cowl the dividend, there may be little or no probability Exxon will minimize its dividend within the close to future.
Dividend Security Ranking: A
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