Will Exxon Mobil Corporation (XOM) Help You Retire Rich?

Since we looked at ExxonMobil last year, the company has given back the point it gained from 2011 to 2012, as its free cash flow contracted last year. The stock has only managed to pick up about 5% in the past year as pressure in the energy industry has affected Exxon harder than you might expect.

In its most recent quarter, Exxon managed to resume its growing ways, with profit rising 6%. But Exxon has suffered from production decreases that put the oil giant at a three-year low, lagging behind Chevron Corporation (NYSE:CVX)‘s modest production growth in the same quarter.

Part of that disparity has to do with the depths — literally — to which Chevron has been willing to go to find new plays. With a huge number of offshore deepwater oil finds in recent years, Chevron has braved the deeps to get them producing. Exxon likely needs to become a bigger player in the deepwater drilling space in order to get production moving back in the right direction.

Also, Exxon has had to defend its decision to remain an integrated oil company rather than spinning off portions of its business. Once they were set free from their exploration-and-production-focused parents, refinery companies Phillips 66 (NYSE:PSX) and Marathon Petroleum Corp (NYSE:MPC) both soared in value, taking full advantage of extraordinarily high spreads for refined products to maximize profits. Yet recently, Exxon’s retention of its downstream segment helped it overcome losses from its E&P activities. In some ways, remaining integrated keeps Exxon more stable than it would be if separated into component parts.

For retirees and other conservative investors, ExxonMobil has a solid dividend and a valuation that’s hard to argue with. Yet you have to be comfortable with the fact that the company has at least some prospects for growth if you want to justify adding Exxon to your retirement portfolio.

The article Will ExxonMobil Help You Retire Rich? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Chevron.

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