Summary
- Oil prices hit a five-month high in April 2019.
- Exxon Mobil has considerable free cash flow upside.
- The company recently announced a major discovery in Guyana.
- Shares are sensibly valued.
- An investment in XOM yields 4.0 percent.
Exxon Mobil (XOM) makes a compelling value proposition for income investors that seek access to a stream of growing dividend income and that want to maintain a shot at capital growth in a rising oil environment. Exxon Mobil recently reported a major new discovery in Guyana that improves the company's value proposition. Further, Exxon Mobil's shares are sensibly valued and offer investors a 4.0 percent entry yield.
Exxon Mobil - A Bet On Rising Oil Prices
Crude oil prices reached a five-month high at the beginning of April, supported by strong fundamentals in the energy industry and a U.S. economy that is robustly plowing ahead.
The reversal in crude oil prices in 2019 comes after a steep drop in energy prices in the fourth quarter of 2018 when fears over an economic slowdown and peak uncertainty with respect to a trade agreement between the United States and China weighed heavily on investor sentiment.
The price recovery is significant, and should have a positive effect on Exxon Mobil's earnings and free cash flow in the first quarter.
