ExxonMobil Corporation (NYSE:XOM), the integrated energy giant, today has seen its highest yield of 4% since 1990. Investors who are on the lookout to add a good value stock from oil and gas sector to their portfolio may want to have a look into ExxonMobil stocks as they are cheap today.
First things first, any company in the field of oil and natural gas can only grow by expanding its production levels continuously. Because, when the production fails, it effectively ceases to exist. That’s been the case with ExxonMobil in the recent past. The company’s production levels fell by 2.7% in 2016 and 2017. Though this might not sound like a big deal, the problem, however, is it has dragged this problem into 2018.
That being said, ExxonMobil is presently concentrating on the long-term profitability and long-term investors, rather than trying to lure the short-term investors who want to see an immediate rise in the production. The company is going ahead with some solid plans which will only come to fruition after a few years.
Apart from huge investments in its onshore U.S. oil and gas, ExxonMobil has some big investments going on in its offshore production units in Brazil, and natural gas units in Mozambique. With all these investments intended towards increased production levels, Exxon is confident of reversing the present downward trend. However, as mentioned earlier, it will take a few years for these projects to be completed.
Is ExxonMobil a buy?
If you are a short-term investor looking for immediate profits, ExxonMobil stocks are not for you. On the other hand, if are a long-term investor who is willing to collect the 4% yield while ExxonMobil starts its full-scale production, buying the stocks today while they are still cheap, could be one of the best bargains you have ever made.
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