How ExxonMobil Survives Oil Price Cycles and Rewards Shareholders
Exxon Mobil Corporation XOM, an integrated energy giant, generates the majority of its earnings from upstream business, which makes its business model extremely vulnerable to the volatility in commodity prices. Despite the vulnerability, XOM has been able to return capital to its shareholders consistently.
For 43 consecutive years, ExxonMobil has been increasing dividend payments. In fact, among the S&P 500 companies, XOM is the second-largest payer of dividends. The integrated major also repurchases shares aggressively. It intended to buy back $20 billion of its shares this year and expects to maintain the pace next year as well.
Thus, it seems that despite the vulnerability, the company has survived all business cycles. This…
