Why Exxon’s Dividend Is Safe and Attractive

Exxon (NYSE:XOM) has made it clear that it plans on maintaining its dividend. That makes Exxon Mobil stock very attractive with its 7.7% dividend yield. The point is that management has made maintaining the dividend a very clear priority. They have broadcast this in several ways.

I suspect that once economic growth returns and the price of oil and gas starts to rise, you will see an increase in the dividend. Until then, we can estimate what the value of XOM stock will be. Combined with the annual yield of 7.7% in the first year, the total “expected” return will be 33.1% in year one. There is no guarantee, but the term “expected” refers to the mathematical probability expectation.In year two the 25.4% plus the now lower dividend yield of 6.1% brings in a total expected return of 31.5% in year two. These are very good returns for most investors.

Source: InvestorPlace

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