Daniel Foelber, The Motley Fool
Tue, Apr 15, 2025, 2:55 AM 5 min read
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Last week's rally successful the broader banal marketplace indexes sprung the Nasdaq Composite (NASDAQINDEX: ^IXIC) backmost upward aft a much than 20% that technically enactment it into a carnivore market. However, it's evident that marketplace volatility whitethorn beryllium acold from over.
Income investors looking astatine the existent scenery whitethorn beryllium wondering if present is the champion clip to bargain dividend stocks fixed the chaotic swings to the upside and the downside. Here are immoderate risks worthy considering earlier buying dividend stocks and why ExxonMobil (NYSE: XOM) is simply a bully illustration of a dividend banal that you tin bargain with assurance during a carnivore market.
Investors who usage dividends for fiscal readying oregon to supplement income successful status volition privation to people companies with reliable payouts. After all, what bully is simply a dividend if a institution cuts it astatine the slightest motion of economical uncertainty?
ExxonMobil has raised its dividend for 42 consecutive years -- which whitethorn travel arsenic a astonishment fixed the ups and downs successful the lipid and state industry. In the past decennary alone, determination was the clang of 2014 and 2015 and the plunge during the COVID-19 pandemic. In fact, ExxonMobil reported its worst twelvemonth connected grounds successful 2020 -- a staggering $22.4 cardinal loss.
Even during a play of precocious uncertainty and a illness successful the planetary economy, ExxonMobil kept its dividend streak live successful 2020 due to the fact that it relied connected the spot of its equilibrium sheet.
ExxonMobil's equilibrium expanse is successful its champion signifier successful implicit a decade.
ExxonMobil's nett full semipermanent indebtedness presumption is conscionable $14.7 billion, which is tiny for a institution of its size. Its fiscal debt-to-equity ratio of 0.08 and debt-to-capital ratio of 12.5% showcase however the institution has reduced its dependence connected indebtedness and tin trust connected escaped currency travel to money operating expenses and semipermanent investments.
In fact, ExxonMobil has the lowest debt-to-capital ratio of the large integrated U.S. and European lipid and state companies -- a adjacent 2nd being its U.S. adjacent Chevron.
ExxonMobil tin enactment its dividend adjacent if margins autumn owed to little lipid and state prices. The institution has considerably improved its outgo operation and technological advancements that person reduced accumulation costs.
ExxonMobil has a semipermanent program done 2030 built astir Brent (the planetary benchmark) crude lipid prices averaging $65 per barrel. However, it besides has an optimistic script astatine $85 Brent and a pessimistic result astatine $55 per barrel. Even astatine $55 per barrel, ExxonMobil expects to gain a currency surplus of $110 cardinal from 2025 to 2030 acknowledgment to higher escaped currency travel from its acquisition of Pioneer Natural Resources, improvement of onshore assets successful the Permian Basin, accumulation enlargement offshore Guyana, and different moves.