By Rob Otman
Exxon Mobil (NYSE: XOM) is a $345 billion company today. Investors that bought shares one year ago are sitting on a -4.88% total return. That’s below the S&P 500’s return of 16.47%.
Exxon Mobil stock is underperforming the market. It’s beaten down, but it recently beat earnings expectations. So is it a good time to buy? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
[iu-adbox]
Earnings-per-Share (EPS) Growth: Exxon Mobil reported a recent EPS growth rate of -38.81%. That’s above the oil & gas industry average of -113.83%. That’s a good sign. Exxon Mobil’s earnings growth is outpacing competitors.
Price-to-Earnings (P/E): The average price-to-earnings ratio of the oil & gas industry is 71.49. And Exxon Mobil’s ratio comes in at 34.38. It’s trading at a better value than many of its competitors.
Debt-to-Equity: The debt-to-equity ratio for Exxon Mobil stock is 24.6. That’s below the oil & gas industry average of 70.78. The company is less leveraged.
Free Cash Flow per Share Growth: Exxon Mobil’s FCF has been lower than its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
Profit Margins: The profit margin of Exxon Mobil comes in at 3.17% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Exxon Mobil’s profit margin is below the oil & gas average of 4.26%. So that’s a negative indicator for investors.
Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Exxon Mobil is 4.64%, and that’s above its industry average ROE of 3.92%.
Exxon Mobil stock passes four of our six key metrics today. That’s why our Investment U Stock Grader rates it as a buy with caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth. For more details, click here.
Thoughts on this article? Leave a comment below. …read more
Source:: Investment You
The post Why Exxon Mobil Stock is Rated a ‘Buy with Caution’ Today appeared first on Junior Mining Analyst.