Exxon Mobil Corporation (NYSE:XOM), the largest oil company in the world with a market capitalization of $357 billion, had a rare day of positive ending yesterday as it gained 2.45%. In the last 6-7 months, the stock closely mirrored the crash in Crude oil and from the August 2014 top around $105, dropped to $83 levels by March 2015. The correction has definitely made the stock more attractive to the investors, especially as the loss in the stock value has been much less compared to the commodity.
Generally Exxon Mobil Corporation (NYSE:XOM) has kept the investors happy with an increasing dividend yield and share buybacks, leading to a shareholder distribution of $23.6 billion. Not only this, the company managed to have a reserve replacement ratio of 104%, in spite of a declining capex, coupled with the best ever safety performance.
The history of oil shows recovery from the dips in the next few years and hence Exxon Mobil Corporation (NYSE:XOM) expects to see the current decline in oil price in that context too. This view keeps the company focused on investments with a long term view. The low price of oil may probably help the company to keep the cost of new long term projects much lower than earlier expected and the payout in the latter years can be expected to be much higher in that case.
Technically, the bear market in the last 1 year is not very encouraging for the bulls but they can argue that the lack of any severe bearish momentum actually points to the internal strength of the stock. Any turnaround can only be confirmed on a break above $86-$90 band but still the investors can use any dip to accumulate the stock. The resolution of the current whipsaw around the major support level of $85 levels will lead to the immediate course.