Energy

Exxon Is Best Performing Dow Stock of 2016, Up 15%

Douglas A. McIntyre

Published: May 28, 2016 9:25 am

Last Updated: January 13, 2020 7:27 am

As oil prices have rebounded, so has the share price of the world’s largest energy company. The stock of Exxon Mobil Corp. (NYSE: XOM) has risen 15.47%, against the performance of the Dow Jones Industrial Average, which is higher by 2.57% to 17,762.55 in the same period.

America’s second largest company announced earnings recently:

Exxon Mobil Corporation today announced estimated first quarter 2016 earnings of $1.8 billion, or $0.43 per diluted share, compared with $4.9 billion a year earlier. The impacts of sharply lower commodity prices and weaker refining margins were partly offset by strong Chemical results.

Revenue plunged from $67.6 billion in the year-ago period to $47.8 billion.

Exxon has continued to pay out its $3 dividend, which gives it a hefty yield of 3.35%.

The big oil company recently warded off an attempt by some shareholders to limit greenhouse gas emissions, and it put a climate expert on its board. Exxon plans to run its business largely as it has in recent years.

Exxon’s shares are not only up. They are trading not far below their 52-week high. Looking back, the stock traded at $67 last August, in the midst of an oil price collapse that took crude under $30. The price of oil recently breached $50 and appears to be headed higher.

If Exxon’s share price tends to run in tandem with oil prices, its 52-week high may be a top. As Bloomberg recently pointed out:

The world’s 50 biggest publicly traded oil companies need an average price of $53 a barrel to stop bleeding cash, oilfield consultant Wood Mackenzie Ltd. said in a report last month. For U.S. shale producers, oil may need to rise into the mid-$50s before drillers respond with a “significant ramp-up” in well completions, Bloomberg Intelligence analysts led by William Foiles said in a May 3 report.

Exxon’s earnings could get better, but perhaps not enough to signal a full recovery.