With shares of Exxon Mobil (NYSE:XOM) trading at around $88.14, is XOM a Buy, a Wait and See, or a Stay Away? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Exxon Mobil has been one of the best stocks to own dating all the way back to the 1970s. Any time someone thought the stock had climbed too high and sold, they made a mistake. Exxon Mobil’s stock is up roughly 5000% since its IPO. This includes five splits and a solid yield along the way. Currently, the yield is 2.60%.
Exxon Mobil was the biggest company in the world until Apple (NASDAQ:AAPL) took that top spot; but, based on Apple’s recent woes, don’t be surprised if Exxon Mobil reclaims that top spot in the near future.
More importantly, Exxon Mobile’s size is the primary reason some investors stay away. They don’t see room for growth. That’s a terrible error. Exxon Mobile is a money-making empire that will always find a way to reward its investors. This fact alone has acted as a great catalyst for the stock’s movement.
E = Debt to Equity Ratio is Low
Exxon Mobil has a debt-to-equity ratio of .07, which is exceptionally low. It’s a slightly better number than two of Exxon Mobil’s biggest competitors, Chevron (NYSE:CVX) and BP (NYSE:BP). Chevron has a debt-to-equity ratio of .41. BP has a debt-to-equity ratio of .09.
Exxon Mobil and Chevron have more cash than debt. Exxon Mobil has $13.26 billion in cash and $8.92 billion in debt. Chevron has $21.58 billion in cash and $12.34 billion in debt. BP, on the other hand, has $16.36 billion in cash and $49.08 billion in debt.
If you’re looking at these numbers from a long-term investing standpoint…