Run a passive income powerhouse with XOM Stock


Source: Jonathan Weiss/

Do you like to take advantage of the cumulative effect of reinvesting dividends? This is a wise long-term strategy to consider as Exxon Mobil (NYSE:XOM) offers strong dividend payouts. Additionally, Exxon Mobil’s commitment to both fossil fuel drilling and emissions reduction efforts makes XOM stocks a sensible portfolio choice.

After all, you don’t have to choose between oil drillers and carbon capture companies when Exxon Mobil offers the best of both worlds. You don’t have to choose between value and growth either, because Exxon Mobil fits perfectly into both categories.

Additionally, there is an earnings event this month that could give Exxon Mobil another opportunity to demonstrate its leadership in the energy market. Indeed, a new company update signals that Exxon Mobil’s results should continue to show strength for the foreseeable future.

What’s going on with XOM Stock?

Unlike many other mega-cap stocks, XOM stock has performed well in 2022 so far. The stock started the year at $63 and has changed, and recently maintained a firm position in the $80s.

Still, even though Exxon Mobil investors did relatively well in the first half of 2020, that doesn’t mean the stock is overvalued. On the contrary, Exxon Mobil’s 12-month price-to-earnings (P/E) ratio of 14.3 indicates that there is a good deal to be had here.

What about passive income investors? No worries, because there is also something for you here. Exxon Mobil offers a forward-looking annual dividend yield of 4.1%, so feel free to reinvest distributions and see how the compounding effect can enhance your portfolio returns.

Potential shareholders should also note that Exxon Mobil has an upcoming quarterly earnings event on July 29. This could of course have an impact on XOM’s stock price.

There’s no need to worry, however, as a company update says Exxon Mobil expects $11 billion in upstream revenue for the second quarter of 2022. This, if it works as expected, would represent the highest figure for Exxon Mobil for any quarter since 2017.

Drilling and capture

As the numbers reveal, Exxon Mobil is still a major player in fossil fuel drilling. In the American Permian Basin, society expects to produce more than 550,000 barrels of oil equivalent per day this year. This would mean a 25% increase in production compared to the increase achieved in 2021.

Yet even as Exxon Mobil drills aggressively, the company seeks to “achieve net-zero emissions of scope 1 and 2 greenhouse gases of assets operated by 2050.” This is a dual objective because energy consumers need petroleum products in the short term but can eventually adapt to alternative fuels.

To this end, XTO Netherlands, a subsidiary of Exxon Mobil, is work with Energy of Neptune, Exploration of rosewood and EBN Capital to advance an offshore carbon capture and storage project in the Dutch North Sea.

This L10 carbon capture and storage project follows the feasibility study carried out by Neptune. Surprisingly, this project could potentially store between 4 and 5 million tons of CO2 annually in selected regions. This could prove crucial as the Netherlands strives to achieve its net zero goals over the next few years.

What you can do now

Exxon Mobil is obviously very active in drilling for fossil fuels. Still, investors can take a passive approach with XOM shares by reinvesting the generous dividends.

Additionally, investors interested in carbon capture projects should also consider taking a position in Exxon Mobil shares. No matter how you slice it, Exxon Mobil remains an energy industry giant with no shortage of shareholder value.

As of the date of publication, neither Louis Navellier nor the member of the InvestorPlace research staff principally responsible for this article holds (directly or indirectly) any position in the securities mentioned in this article.


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