What Investors Should Know Before Buying Exxon Mobil Stock
Introduction:
Exxon Mobil Corporation is one of the most well-known and established companies in the energy sector, and is a popular choice for investors who are looking to diversify their portfolios with energy stocks. Many investors may be drawn to the potential stability that the company offers, but it is important to become educated on the risks associated with investing in Exxon Mobil before making any decisions.
Business Overview:
Exxon Mobil is a major multinational oil and gas corporation headquartered in Irving, Texas. The company is the largest publicly traded oil and gas company in the world, and is the fifth largest public company in terms of total revenue. Exxon Mobil operates in over 70 countries, and its main businesses are oil and natural gas production, refining, and marketing.
Performance:
Exxon Mobil stock has generally been considered to be relatively stable, having outperformed the S&P 500 in many years. The company also offers generous dividends to shareholders, returning almost $15 billion to shareholders in 2018 alone. The stock has seen a slight decline in recent years due to the company’s inability to live up to market expectations, but it is still seen as being a relatively strong and safe investment.
Risks Associated with Investing in Exxon Mobil Stock:
The industry as a whole is cyclical, meaning that the company’s performance is linked to oil prices which can vary significantly over time. This means that the stock could potentially go either way depending on market forces.
Exxon Mobil’s reserves are declining, as the company has struggled to keep up with the growing demand for oil. This could potentially lead to reduced earnings and lower returns for investors over time.
The company has seen significant environmental challenges in recent years, leading to increased regulation and potential legal liabilities. This could result in decreased profits and increased costs for the company.
Conclusion:
Overall, Exxon Mobil stock presents the potential for stable returns and generous dividends, but investors should be aware of the potential risks associated with investing in the company. It is important to do research and to understand the market before making any decisions on investing in Exxon Mobil stock.