Exxon Mobil the Global Energy Term Paper

Download this Term Paper in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Term Paper:

These unwavering expectations provide the foundation for our commitments to those with whom we interact: " (JLP, 2005).

Financial Goals

ExxonMobil does not explicitly state its financial goals. This is proprietary information that is not published. However, ExxonMobil does suggest that it intends to keep up with global demand. ExxonMobil is focused on long-term growth, rather than short-term gains. One could expect the financial goals of the company to include a plan for long-term steady growth that keeps pace with global demand.

Financial Analysis

Exxon Mobil is traded on the New York Stock Exchange under the stock ticker XOM. XOM ended the day on January 28, 2008 with a closing price of 85.08. It is expected that this price will climb to 101.00 within one year (Yahoo Finance, 2008). It is a high volume stock, in terms of the number of trades. It has a healthy 6.92 Earnings Per Share and a Market Cap of 464.85Billion (Yahoo Finance, 2008). XOM pays a dividend of $1.40 that has experienced a growth rate of 1.70%. (Yahoo Finance, 2008). XOM has a P/E of 12.30. These financials, combined with a positive growth prospect for the long-term future would make XOM appear to be a winner for portfolio growth.

When one compares financial ratios to the Industry, sector and S & P. 500, one can get better picture of how ExxonMobil compares. When one compares the P/E ratio, XOM performs slightly better than the industry average. However, over the past five years, the P/E ration has demonstrated a range from 10.40 to 23.36 (Reuters, 2008). The industry and sector out performed XOM, but this is largely due to the long-term nature of some of ExxonMobil's projects.

XOM has a beta of 0.87, compared to 0.75 for the industry. This beta reflects a comparison with the S & P. 500, rather than the DOW (Reuters, 2008). This is a relatively steady stock that closely follows the S & P. 500, but it could not be considered a tracking stock. Price to sales hovers at 1.23. This is higher that the industry, but lower than the S&P 500.

Gross sales were down -2.33 compared to the previous 12 months. However, the industry was down by -3.72. This is largely a result of rising oil prices resulting in curbed consumer spending. It is a reflection of a downturn in the general economy. This trend may continue for some time, but will once again recover at some time in the future. This short-range downturn does not reflect long-term performance. XOM has demonstrated a 12.16% growth rate over the past five years (Reuters, 2008).

XOM has demonstrated a 5-year Earnings per Share growth rate of 25.08 (Reuters, 2008). This is slightly lower than industry standards. However, this reflects the effects of capital expenditures on exploration efforts. Five-year capital spending on new projects and exploration has also increased a healthy 9.13%. Although this expenditure represents a short-term liability and decreased profits, it also demonstrates ExxonMobil's commitment to long-term growth. The oil and gas industry are characterized by high capital expenditures related to expansion. This is an ongoing process in this industry.

The real question is not how much they are spending on expansion efforts, but rather if they are seeing a return on their investment. XOM has a long standing reputation for maintaining long-term value by realizing a healthy Return on Assets, Return on Investments, and Return on Equity. Over the past five years, Yom's average Return on Assets was 14.58. Its average Return on Investment was 19.14 and its Return on Equity was a healthy 28.23 (Reuters, 2008). These numbers demonstrate that XOM realizes a healthy return on its expenditures. It meets its goal of preserving shareholder equity and continuing to offer value to its investors.

Inventory turnover and asset turnover have longer cycles than the average S & P. 500 stock. This is due to the processes involved in the production of crude. One of the most attractive aspects of XOM is that although capital expenditures are high, it retains a low Long-Term Debt to Equity ration of 0.06. It has a current ration of 1.52, compared to 1.36 for the industry (Reuters, 2008).

As far as investment opportunities are concerned, ExxonMobil has many challenges ahead of it, as the industry prepares to meet global energy needs. However, ExxonMobil is a leader and has an established economy of scale, compared to many other producers. It has healthy financials. The recent downturn that it has experienced is not expected to effect long-term prospects. One of the most attractive aspects of XOM is that it provides investors with a source of income through dividends.

ExxonMobil will not be a stock that will provide quick returns. It is more suitable to the long-term investor that wishes for a small amount of income, against sustained growth. ExxonMobil is faced with the same challenges and opportunities as others in the industry. ExxonMobil has the right set of credentials that would lead one to consider it to be a perfect long-term prospect for the growth portfolio.


JLP (2005). Exxon Mobil's (XOM) Mission Statement. April 27, 2005. Retrieved January 27, 2008 at http://manonamission.blogspot.com/2005/04/exxon-mobils-xom-mission-statement.html

Reuters. 2008. Exxon Mobil Corp. XOM (NYSE). Retrieved January 27, 2008…[continue]

Cite This Term Paper:

"Exxon Mobil The Global Energy" (2008, January 30) Retrieved December 6, 2016, from http://www.paperdue.com/essay/exxon-mobil-the-global-energy-32554

"Exxon Mobil The Global Energy" 30 January 2008. Web.6 December. 2016. <http://www.paperdue.com/essay/exxon-mobil-the-global-energy-32554>

"Exxon Mobil The Global Energy", 30 January 2008, Accessed.6 December. 2016, http://www.paperdue.com/essay/exxon-mobil-the-global-energy-32554

Other Documents Pertaining To This Topic

  • Exxon Mobil Was Founded 125

    Additionally the company is increasingly concerned with meeting the energy needs of people and organizations throughout the world ("Company Profile"). To this end Exxon Mobil is committed to "exploration and production of crude oil and natural gas; the manufacture of petroleum products; and the transportation and sale of crude oil, natural gas, and petroleum products ("Company Profile")." In addition Exxon Mobile is a primary producer and marketer of both commodity

  • Gas Prices Exxon Mobil Exxon

    " As far as economic conditions are concerned, as part of the company's strategy it is committed to aiding people with the social and economic problems that they face (Environment and Society). This is known as the community investment strategy. This strategy encompasses human rights, education, and enterprise development (Environment and Society). BP's management is also concerned with decreasing dependence on oil and has created various initiatives to create new sources

  • Global Warming United States and the World

    Global Warming, United States and the World There are concerns that the natural ecosystem and human society is not capable of handling rapid changes in climate. Trying to deal with this challenge in a proper manner, a number of international treaties have been drawn up and many different activities have been arranged. In the year 1994, the United Nations Framework Convention on Climate Change (UNFCCC) came into being. Since that year,

  • Global Environment Thousands of Companies Compete in

    Global Environment Thousands of companies compete in the global environment. Some of the most prominent global companies are Exxon Mobil, Microsoft, Nestle, Honda, Coca-Cola, Anheuser-Busch InBev, and HSBC. These companies all operate in different industries, and many are based outside of the United States. For companies, operating in the global environment gives them access to a wide range of customers, providing not only growth opportunities but geographic diversification. Global presence can

  • Shell Global

    Shell Global Shell's Global Positioning Shell's Global Positioning Shell is one of the world leading energy and petrochemical company that operates in more than 90 different countries (shell.com, 2010). Shell's main business strategy is to reinforce their position as a leader in the gas and oil market, to maintain a competitive edge and increase shareholder wealth. The company is also interested in meeting the global demand for energy in a responsible and safe

  • Worldwide Energy Market Focusing on

    However, they are worth considering on the long haul. Since the oil and gas reserves are suffering from a chronic shortage, a major company such as Exxon should think strategically and expand into this area. The discussion is more complex, in the sense that intensive research and development efforts are needed to both improve the above mentioned alternatives and to discover new sources of energy. Exxon Financial Results Due to the

  • Mergers in the Oil Industry

    Oil Industry For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion. The oil and gas industry is extremely important in how the world operates and sustains its living. The ability to capture the nature resources provided

Read Full Term Paper
Copyright 2016 . All Rights Reserved