Exxon Mobil Corporation (XOM) Is Still The Best Energy Company In The World

Exxon Mobil Corporation shares are attractive. Exxon’s forward PE of 17 is lower than the S&P 500’s forward PE of 18. Exxon’s dividend yield of 3.1% is significantly better than the 10 year’s yield of 2.15%. Exxon management is very shareholder friendly. Since 2005, Exxon has done hundreds of billions of dollars in share buybacks to reduce Exxon’s float from 6.33 billion shares to 4.19 billion today.  Not surprisingly, many hedge funds own Exxon Mobil Corporation (NYSE:XOM). Yacktman Asset Management owns seven million shares while Adage Capital Management owns more than half a billion dollars’ worth of Exxon. Fisher Asset Management also owns over four million shares.

Following the picks of hedge funds can generate significant alpha. Our research shows that the 15 most popular small-cap stocks among hedge funds have outperformed the market by nearly a percentage point per month between 1999 and 2012. We have been forward testing the performance of these stock picks since the end of August 2012. These stocks managed to return more than 132% over the ensuing 2.5 years and outperformed the S&P 500 Index by nearly 80 percentage points (read the details here).

Because of its great balance sheet and secure cash flows, Exxon Mobil Corporation (NYSE:XOM) is an all-weather security. In bad times, Exxon’s stock doesn’t fall that much and pays its shareholders a nice dividend. When crude fell over 50%, for example, Exxon’s stock fell just 19% peak-to-trough. In good times, Exxon Mobil Corporation reaps record corporate profits and buys back a lot of stock, rewarding shareholders for their loyalty. If history is any guide, Exxon shareholders will continue to realize great returns from their holding for decades to come.

Disclosure: None