Exxon Mobil: A Top Pick Among Cheap High Dividend Stocks

Exxon Mobil Corporation (XOM) has long been a favorite among income investors, thanks to its consistent dividend payout and growth. With a current dividend yield of 3.60%, XOM offers a attractive income stream while trading at a relatively low valuation. Let's explore why Exxon Mobil is an appealing choice among cheap high dividend stocks.



Strong Fundamentals and Dividend Growth

Exxon Mobil boasts a robust balance sheet, with a strong cash position and low debt levels. The company's free cash flow generation has been consistently strong, allowing it to maintain and grow its dividend payout. With a 10-year average dividend growth rate of 6.28%, XOM has demonstrated its commitment to returning capital to shareholders.

Attractive Valuation and Yield

Exxon Mobil's stock is currently trading at a price-to-earnings ratio of 13.83, which is below its historical average and the industry average of 16.50. This indicates that the stock may be undervalued relative to its peers. Additionally, XOM's dividend yield of 3.60% is higher than the average yield of its peers (4.00%) and the historical average (4.50%).



Geopolitical Tailwinds and Production Challenges

While Exxon Mobil has faced production tailwinds and geopolitical challenges, the company has demonstrated its ability to navigate these issues and maintain stable production levels. Exxon Mobil's strong financial position and operational expertise have allowed it to weather these storms and continue to generate significant free cash flow.

Analyst Coverage and Price Targets

Analysts covering Exxon Mobil have a median price target of $160.21, indicating a significant upside potential from the current stock price of $110.24. The majority of analysts have a 'Buy' or 'Hold' rating on the stock, reflecting their positive outlook on Exxon Mobil's fundamentals and growth prospects.



In conclusion, Exxon Mobil Corporation (XOM) is an attractive choice among cheap high dividend stocks, thanks to its strong fundamentals, dividend growth, and attractive valuation. While the company has faced production tailwinds and geopolitical challenges, its robust financial position and operational expertise have allowed it to maintain stable production levels and generate significant free cash flow. With a current dividend yield of 3.60% and a median price target of $160.21, Exxon Mobil offers an appealing combination of income and growth potential for investors.