Exxon Mobil Corp (NYSE:XOM): A Reliable Dividend Stock with Strong Financial Health

Dividend investors often look for a mix of yield, sustainability, and financial stability. One way to find such stocks is by using a dividend-focused screener that selects companies with strong dividend ratings while keeping solid profitability and financial health. EXXON MOBIL CORP (NYSE:XOM [https://www.chartmill.com/stock/quote/XOM/profile]) stands out as a potential pick from this method, fitting criteria that focus on dependable payouts without weakening the company’s core strength.

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KEY DIVIDEND METRICS

Exxon Mobil’s appeal to dividend investors comes from several factors detailed in its fundamental analysis report [https://www.chartmill.com/stock/quote/XOM/fundamental-analysis]:

* DIVIDEND YIELD: At 3.54%, XOM’s yield is higher than the S&P 500 average of 2.36%, providing a good income stream. While not the top in its sector (which averages 6.28%), it balances yield and safety.
* DIVIDEND GROWTH: The company has raised its dividend at an annual rate of 3.02% over the past 10 years. Though not high, this growth shows consistency, a key trait for long-term dividend investors.
* PAYOUT RATIO: At 55.57% of earnings, the payout is manageable. While on the higher side, it allows for reinvestment and avoids the risks linked to very high ratios (e.g., above 80%).
* TRACK RECORD: Exxon Mobil has paid dividends for over 10 years without cuts, proving reliability even in unstable energy markets.

PROFITABILITY AND FINANCIAL HEALTH

A lasting dividend needs a company to produce steady profits and maintain a strong balance sheet. Exxon Mobil’s fundamentals back this:

* PROFITABILITY: With a ChartMill Profitability Rating of 6/10, Exxon Mobil shows decent margins. Its return on equity (11.81%) and return on invested capital (7.61%) beat many peers, showing efficient capital use. Operating margins have also grown in recent years.
* FINANCIAL HEALTH: The company’s Health Rating of 6/10 points to a stable balance sheet. Key strengths include a low debt-to-equity ratio (0.13) and a strong Altman-Z score (4.06), suggesting low bankruptcy risk. Liquidity metrics, like the current ratio (1.25), are sufficient, though the quick ratio (0.88) indicates some reliance on inventory to cover short-term needs.

VALUATION AND GROWTH CONSIDERATIONS

Exxon Mobil trades at a P/E ratio of 15.23, slightly below the industry average (18.64) and well under the S&P 500’s 26.84. This fair valuation lowers downside risk. However, growth outlooks are mixed: while EPS is expected to grow at 11.51% yearly, revenue is forecast to drop (-6.52%), reflecting wider sector challenges.

WHY THESE CRITERIA MATTER

The screening approach highlights:

* DIVIDEND SUSTAINABILITY: A moderate payout ratio and steady growth history lower the chance of cuts.
* PROFITABILITY: Ensures the company can support dividends without hurting operations.
* FINANCIAL HEALTH: A solid balance sheet protects dividends during tough times.

Exxon Mobil meets these standards, making it a choice for investors looking for steady income with controlled risk.

For more dividend stock ideas, check the full Best Dividend Stocks screen [https://www.chartmill.com/stock/stock-screener?sid=288&f=p_pg10,v1_50b500,sl_dvd_7_X,sl_he_5_X,sl_pr_5_X&v=19&s=dvd&sd=DESC&cpl=2&bc=false&o1=3&op1=200,16711680&o2=3&op2=50,255&o3=1&o3=1].

_Disclaimer: This article is not investment advice. Always do your own research or talk to a financial advisor before making investment decisions._