Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  Exxon Mobil Corporation    XOM

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

Exxon Mobil Seen Sharply Boosting Dividend This Month

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/18/2012 | 12:43am CET

--Analysts expect Exxon to increase its quarterly dividend by 10% to 33%.

--The move would bring the oil giant closer to rivals' cash distribution

--Over the past three decades, company has opted for conservative, but steady dividend increases.

 
  By Isabel Ordonez 
  Of  
 

Exxon Mobil Corp. (>> Exxon Mobil Corporation) is expected to next week unveil a higher-than-average dividend increase, pleasing investors who have long urged the company to bring its cash distribution closer to its oil-industry competitors.

Some analysts forecast Exxon will lift its quarterly dividend, currently at 47 cents per share, by between 10% and 33%. That is a significant jump from the average 6.5% increase over the last decade.

"Exxon Mobil is expected to react to increasing pressure from shareholders in recent years to offer a more generous dividend," says Alan Good, an analyst at Morningstar.

A sharp spike is expected after Chief Executive Rex Tillerson told analysts at the company's annual meeting in March that Exxon was aware its dividend yield was low compared to its rivals. He added the oil giant was evaluating a possible increase by the end of the second quarter, when the company expects to finish repurchasing the shares issued to acquired natural-gas producer XTO Energy in 2010.

Exxon, the world's largest publicly owned oil company, also typically announces its annual dividend increase the last week of April.

Exxon is reviewing whether higher oil prices anticipated in the future will be sufficient to allow for a bigger dividend, Tillerson added.

Chevron Corp. (CVX), Royal Dutch Shell PLC (RDSA, RDSB, RDSA.LN, RDSB.LN) and BP PLC (BP) all offered a higher dividend yield than Exxon, causing some investors to question Exxon about its preference to spend more in share buybacks than dividends.

A sharp dividend increase would be a departure for Exxon, which for three decades has preferred to offer conservative, but constant dividends, despite the ups and downs of the energy markets.

By contrast, Shell froze its dividend for two years in 2010 due to the weak economic outlook. Also BP suspended its dividend to pay for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010

Still Exxon's dividend yield, currently at 2.2%, is below Chevron's 3.1%, while Shell and BP's are over 4.5%

Analysts don't expect Texas's Exxon Mobil to lift its dividend to a level that will close the gap with rivals, but they do forecast a substantial increment that will soothe investors' woes.

Exxon is likely to take "an outright positive action in response to shareholder wishes," Sankey said in a note to clients. "Dividend is likely to be stepped up to yield closer to Chevron and within more reasonable distance of Shell and BP." Sankey expects a 33% dividend increase that will take Exxon's annual dividend yield close to 3%.

UBS analyst William Featherston forecasts a spike of about 15%, while Argus Research analyst Phil Weiss expects a 10% increment.

Exxon Mobil declined comment.

A sharp dividend increase is not an easy step for Exxon Mobil because it is a permanent commitment, that unlike share buybacks, can't be cut off without a major backlash from investors, said Fadel Gheit, an analyst with Oppenheimer & Co.

The company has to carefully analyze its future cash flow and make sure it has enough money to first finance its huge capital annual expenditure of over $37 billion annually for the foreseeable future even if oil prices collapsed, Gheit said.

"Oil is over $100 a barrel today, but nobody can guarantee it will stay there," says Gheit, who said Exxon is likely to increase its dividend by 10%.

UBS estimates Exxon Mobil needs WTI crude price of $66 per barrels in order to generate enough cash flow to equal to the company's capital expenditure budget plus a 15% increase in dividend.

Light, sweet crude for May delivery on the New York Mercantile Exchange settled up $1.27 a barrel, at $104.20 a barrel, the highest price since April 2.

-By Isabel Ordonez, Dow Jones Newswires; 713-547-9207; isabel.ordonez@dowjones.com

(MORE TO FOLLOW) Dow Jones Newswires

04-17-12 1842ET

Stocks mentioned in the article : Exxon Mobil Corporation
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on EXXON MOBIL CORPORATION
03:19p EXXON MOBIL : West Qurna oil production near half a million bd
02/24 Canada energy sector sidelined as Big Oil chases fatter profits
02/24 SEVAN MARINE : Exxon, Sevan ink FLNG frame agreement
02/24 EXXON MOBIL : Haslam says he expects Corker to run for third Senate term
02/24 SEVAN MARINE : secures long term framework agreement with ExxonMobil
02/23 EXXON MOBIL CORPORATION (NYSE : XOM) Files An 8-K Results of Operations and Fina..
02/23DJDow Extends Recent Streak of Gains
02/23 EXXON MOBIL CORP : Regulation FD Disclosure (form 8-K)
02/23 EXXON MOBIL : cuts 3 bn barrels from oil reserves
02/23 INTEROIL USA : Completes ExxonMobil Transaction
More news
Sector news : Oil & Gas Refining and Marketing - NEC
02/24 Canada energy sector sidelined as Big Oil chases fatter profits
02/24DJCorrection to article on energy sector's position on border-adjustment tax
02/24DJPHILLIPS 66 : Reports FCCU Maintenance at Borger Refinery
02/24 YPF, Shell sign deal for Vaca Muerta pilot project
02/24DJBorder-Adjustment Tax Divides Energy Sector -- Update
More sector news : Oil & Gas Refining and Marketing - NEC
News from SeekingAlpha
02/24 Exxon's big reserves cut is a chance to reset, Bloomberg's Denning writes
02/24 A Dividend Portfolio Built From The World's Best Dividend ETFs
02/24 Noble Corp. Gets 2-Year Contract From Exxon Mobil
02/24 WALL STREET BREAKFAST : A Big Wow For The Dow
02/24 EXXON MOBIL : Scary Headlines On Reserves Cut Are An Exaggeration
Advertisement
Financials ($)
Sales 2017 304 427 M
EBIT 2017 27 267 M
Net income 2017 17 344 M
Debt 2017 34 652 M
Yield 2017 3,77%
P/E ratio 2017 19,48
P/E ratio 2018 16,16
EV / Sales 2017 1,22x
EV / Sales 2018 1,14x
Capitalization 336 214 M
More Financials
Chart EXXON MOBIL CORPORATION
Duration : Period :
Exxon Mobil Corporation Technical Analysis Chart | XOM | US30231G1022 | 4-Traders
Full-screen chart
Technical analysis trends EXXON MOBIL CORPO...
Short TermMid-TermLong Term
TrendsBearishBearishBearish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 26
Average target price 88,6 $
Spread / Average Target 9,2%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Darren W. Woods Chairman, President & Chief Executive Officer
Andrew P. Swiger Principal Financial Officer & Senior VP
Michael J. Boskin Independent Director
Samuel J. Palmisano Independent Director
Steven S. Reinemund Independent Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
EXXON MOBIL CORPORATIO..-9.40%336 214
ROYAL DUTCH SHELL A-5.06%216 738
BP PLC-12.26%109 287
CHINA PETROLEUM & CHEM..8.69%100 930
SAUDI BASIC INDUSTRIES..--.--%77 804
RELIANCE INDUSTRIES LI..9.82%57 592
More Results