Wednesday, September 23, 2015

Recent Buy - Exxon Mobil (XOM)

Hi Everyone,

The buys keep piling up this month.  This is the last buy post I have right now so next post will be the dividend income for August post...  just a tad bit behind.  

Personally, these buy posts make me hungrier than ever to keep saving, keep making money and keep investing.  The income that we are starting to make every month is starting to put a significant dent into our expenses.  If you jump over to our Portfolio page, you can see that we almost have an entire month of expenses taken care of if we choose to quit our day jobs.  Eleven more months to go and we are home free!!  In a previous post, I asked you readers what company I should buy but, there were no comments and our money is just burning a hole in our pockets so no more waiting around.  

With this purchase, my wife and I have put a total of around $40,000 to work since the beginning of 2015.  My goal of investing roughly $40,000 has been accomplished! We are about three quarters of the way through the year and we still have the pedal to the metal.  We are trying aggressively to put another 6-10K to work this year.  We shall see how it goes!  So now for the numbers... 

We purchased 28 shares of Exxon (XOM) at $72.43.  This purchase adds $81.76 of annual dividends to our account.

We now own 63.331 shares of XOM as this was an addition to previous purchases.  We are invested in 39 individual companies.  

XOM Chart:


P/E:  12.88
Yield:  4.04%
Market Cap:  305B
Dividend Growth Rate (3yr):  13%
Dividend Growth:  32 years
Payout Ratio: 73%

Like my last purchase, Exxon needs no introduction.  The company is massive and generates an insane amount of revenue per year.  As you can see from the chart above, every time XOM has pulled back a considerable amount, it has been a buying opportunity.  Unfortunately, they have reduced their share buyback in favor of keeping the dividend streak alive.  I applaud their effort, but this is one of those times where I'd much rather take a quarter of a percent raise in the dividend and have them use the savings to buyback as many shares as possible.  Apple did this really well in the recent past when their stock price was under pressure and now their stock has rallied past $100 but is still under the 700 Billion dollar market cap they once saw before the split.

Exxon has pulled back roughly 25% from its highs and I believe it is a good time to add some capital.  Will oil go lower, maybe, but can it go higher, maybe.  The only thing I do know is that Exxon is a massive company and they have weathered low oil prices before.  I suspect that they will be able to do the same this time.  Plus, the risk/reward I think is pretty attractive right now.  I think there is a greater possibility that we see higher oil prices in 1 year than lower prices.  I'm in it for the long haul so why not try to buy some cheap shares!

The yield is a bit lower than my overall portfolio but like I said above, I think the share price is attractive after this pullback so I want to buy some more.  I am looking to buy some more companies in the oil/gas field with the next 6-10K we are hoping to invest this year.  Stay tuned!  And if you have any suggestions, please let me know.  I am looking at getting some more KMI under $30.

You can check out all the other purchases we have made for the year on my Stock Purchases and Sells page.

So there you have it, the next building block on the path to the American Dividend Dream!  What do you think, good purchase, bad purchase?  What are you looking to buy next?



  1. Out of all the oily stocks, this one has to be the safest play! I have been looking at RDS, CVX, etc... but I still don't own any XOM. I will have to add at these levels though. Great buy and congrats!


    1. Yes, I really like Exxon based on their past performance. They have been around a long time and have weathered low oil prices before, I'm sure they will be just fine. Being a complete integrated oil company, their refining business should help them out with lower oil prices. We shall see how it all shakes out.

  2. No doubt the yield is hard to ignore for many of the energy majors and by the looks of it XOM seems to offer a sustainable dividend. So I guess just get paid to wait while energy recovers in the coming years. Nice buy.

    1. Over 4% is nothing to sneeze at. There are other companies that have a higher yield but some have them have not declared a dividend raise yet. Exxon is in a great position to potentially acquire some smaller oil companies or continue raising that dividend in the face of low oil prices. I would not mind if the stock prices of other oil companies continue to stay low so I can pick up a couple others.

      Thanks for commenting.