With shares of Exxon Mobil (NYSE:XOM) trading at around $88.97, is XOM an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

This article will be a hybrid of sorts. Exxon Mobil will be the primary focus, but we’ll also put a little twist on it.

Here’s something you already know: Exxon Mobil is involved in the business of the exploration and production of natural gas on a global scale. You might also be aware that ExxonMobil has been one of the best investments on the planet for several decades. Furthermore, it’s possible that you will know all the information about to be presented, but even if that’s the case, it’s worth a review.

Instead of looking at recent stories that might move the stock for one day, we’re going to focus more on the fundamentals, which is a better indicator of what might happen over the long run. We’re going to compare ExxonMobil’s fundamentals to the fundamentals of BP plc (NYSE:BP) and Chevron Corporation (NYSE:CVX). To make it fun, we’ll keep a score. Then, we will determine the best investment of these three companies based on that score. This doesn’t mean the winner will actually be the best investment going forward. Think of it more as one of many determining factors to consider.


Keep in mind that these three companies are different in size. Exxon Mobil has a market cap of $398.63 billion. Chevron has a market cap of $230.35 billion. BP has a market cap of $128.17 billion. Also, not all stats will be included in the chart below. There will be more on the following pages. What fun is a competition without any suspense?

So far, Exxon Mobil is most impressive in ROE and operating cash flow. BP is most impressive in dividend yield. Chevron is most impressive in value and operating margin. Looks like it’s going to be a tight race. We wouldn’t want it any other way.

Let’s take a look at some more important numbers.

E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for Exxon Mobil is much stronger than the industry average of 0.30. It’s also stronger than the debt-to-equity ratios for BP and Chevron. However, Chevron has the most impressive balance sheet.


T = Technicals on the Stock Chart Are Mixed 

Exxon Mobil hasn’t performed as well as many other stocks throughout the broader market over the past year, but it’s important to look at the big picture. For example, there are very few stocks that can hold a candle to Exxon Mobil for all-time performance. This is excluding aggressive growth stocks that haven’t been around very long. Many of these stocks will eventually become too expensive and come back down to reality faster than a penthouse elevator with a cut cord. When Exxon Mobil corrects, it does so in a methodical manner. If you’re a fan of slow and steady, then Exxon Mobil should be strongly considered.

Getting back to our little competition, or big competition considering the size of these companies, Chevron is the clear winner for stock performance based on the timeframes listed below. However, it should be noted that Exxon Mobil has outperformed Chevron all-time.


At $88.97, Exxon Mobil is trading below its 50-day SMA and 100-day SMA, but above its 200-day SMA.

50-Day   SMA


100-Day   SMA


200-Day   SMA


E = Earnings Have Been Impressive           

Earnings have steadily increased on an annual basis since 2010. Revenue came down a little in 2012, but this shouldn’t dissuade anyone from considering Exxon Mobil as an investment.


When we look at the last quarter on a year-over-year basis, we see a decline in revenue and an increase in earnings.


T = Trends Might Support the Industry

The industry has been performing well as a whole. Looking ahead, Exxon Mobil has more natural gas exposure than its competitors. If natural gas prices increase, as they are expected to, then it could negatively impact the company. That said, this still wouldn’t be a major blow. The biggest threat would be a reversal in loose monetary policy by the Federal Reserve. If this happens, then the entire industry will suffer, but it will still hold up better than most industries due to the sheer size of the companies and their ability to manage challenges thanks to large cash flows.

Now let’s take a look at the next page for the Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?


If you have been keeping score for every stat, then you know that Chevron is a slight winner over Exxon Mobil. BP fell well behind. Chevron is best in the following categories: value, operating margin, balance sheet, and stock performance. Exxon Mobil is best in the following categories: ROE, debt-to-equity-ratio, and operating cash flow. BP is best in dividend yield.

If you look closely, the numbers for Exxon Mobil and Chevron are very close. They’re both winners, and they’re both better options than BP.

Exxon Mobil expects oil and gas production levels to slip in 2013, but this isn’t the type of stock to own for one year. It’s the type of stock to own for many years, if not decades. Exxon Mobil is at the expert level when it comes to capitol allocation, which should help investors feel at ease.

Exxon Mobil is a long-term OUTPERFORM.

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