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Exxon Mobil Corporation (XOM - Free Report) will expand its share buyback program to $50 billion to enhance shareholder returns and raise dividends.
The decision has been made as the company opposes a political backlash by offering investors the profits from the surging commodity prices.
ExxonMobil would spend $50 billion to buy back its shares from 2022 to 2024, indicating an increase from the current $30-billion program set to end in 2023. The company also increased its annual dividend payment for the 40th consecutive year. It expects to pay out $30 billion to shareholders by 2022-end, which includes $15 billion in dividends and $15 billion in share repurchases.
ExxonMobil’s corporate plan is expected to double earnings and cash flow potential by 2027 compared with 2019 levels. The plan supports the company’s strategic priorities, including safety, shareholder returns, earnings and cash flow growth, cost and capital efficiency, and reduction in greenhouse gas emission intensity.
In 2023, ExxonMobil expects to spend $23-$25 billion on projects, up from $22 billion this year. The company increased its planned spending on low-carbon projects to $17 billion through 2027, up 15% year over year. XOM is keeping its annual capital expenditure at $20-$25 billion over the next five years. More than 70% of the company’s spending will be allocated to developments in the Permian Basin, Guyana, Brazil and LNG projects worldwide.
ExxonMobil expects upstream production to increase by 500,000 oil-equivalent barrels per day to 4.2 million oil-equivalent barrels per day by 2027. Upstream emission intensity is also anticipated to be reduced by 40-50% through 2030 compared with 2016 levels.
Oil earnings have surged after Russia’s invasion of Ukraine sent global oil and gas prices soaring. The expanded share buyback program continues ExxonMobil’s focus on diverting the proceeds from higher prices to shareholders instead of spending on a new drilling campaign.
Price Performance
Shares of ExxonMobil have outperformed the industry in the past three months. The stock has gained 7% compared with the industry’s 5.7% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
Schlumberger Limited (SLB - Free Report) is a leading oilfield services company, providing services to oil and gas explorers and producers across the world. SLB’s third-quarter 2022 earnings of 63 cents per share beat the Zacks Consensus Estimate of 55 cents.
Schlumberger is expected to see an earnings surge of 68% in 2022. As of Sept 30, 2022, SLB had approximately $3,609 million in cash and short-term investments. It had long-term debt of $12,452 million at the end of the third quarter.
Helmerich & Payne Inc. (HP - Free Report) is a major land and offshore drilling contractor in the western hemisphere, having the youngest and most efficient drilling fleet. HP’s fiscal third-quarter 2022 adjusted profit of 27 cents per share beat the Zacks Consensus Estimate of 5 cents.
Helmerich & Payne is expected to see an earnings surge of 277.8% in 2022. HP boasts a strong balance sheet, carrying $542.3 million in long-term debt. The company’s debt-to-capitalization stands at just 16.6% compared with many of its peers that are hugely burdened with debts.
Patterson-UTI Energy (PTEN - Free Report) is one of the largest North America land drilling contractors, having a large, high-quality fleet of drilling rigs. PTEN’s third-quarter 2022 adjusted net profit of 28 cents per share beat the Zacks Consensus Estimate of 19 cents.
Patterson-UTI is expected to see an earnings surge of 128% in 2022. PTEN doubled its quarterly cash dividend to 8 cents per share from the previous 4-cent payout. The dividend will be paid out on Dec 15, 2022, to shareholders of record as of Dec 1, 2022. PTEN also increased its share repurchase authorization to $300 million.
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ExxonMobil (XOM) Announces $50B Share Buyback, Ups 2023 Capex
Exxon Mobil Corporation (XOM - Free Report) will expand its share buyback program to $50 billion to enhance shareholder returns and raise dividends.
The decision has been made as the company opposes a political backlash by offering investors the profits from the surging commodity prices.
ExxonMobil would spend $50 billion to buy back its shares from 2022 to 2024, indicating an increase from the current $30-billion program set to end in 2023. The company also increased its annual dividend payment for the 40th consecutive year. It expects to pay out $30 billion to shareholders by 2022-end, which includes $15 billion in dividends and $15 billion in share repurchases.
ExxonMobil’s corporate plan is expected to double earnings and cash flow potential by 2027 compared with 2019 levels. The plan supports the company’s strategic priorities, including safety, shareholder returns, earnings and cash flow growth, cost and capital efficiency, and reduction in greenhouse gas emission intensity.
In 2023, ExxonMobil expects to spend $23-$25 billion on projects, up from $22 billion this year. The company increased its planned spending on low-carbon projects to $17 billion through 2027, up 15% year over year. XOM is keeping its annual capital expenditure at $20-$25 billion over the next five years. More than 70% of the company’s spending will be allocated to developments in the Permian Basin, Guyana, Brazil and LNG projects worldwide.
ExxonMobil expects upstream production to increase by 500,000 oil-equivalent barrels per day to 4.2 million oil-equivalent barrels per day by 2027. Upstream emission intensity is also anticipated to be reduced by 40-50% through 2030 compared with 2016 levels.
Oil earnings have surged after Russia’s invasion of Ukraine sent global oil and gas prices soaring. The expanded share buyback program continues ExxonMobil’s focus on diverting the proceeds from higher prices to shareholders instead of spending on a new drilling campaign.
Price Performance
Shares of ExxonMobil have outperformed the industry in the past three months. The stock has gained 7% compared with the industry’s 5.7% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Schlumberger Limited (SLB - Free Report) is a leading oilfield services company, providing services to oil and gas explorers and producers across the world. SLB’s third-quarter 2022 earnings of 63 cents per share beat the Zacks Consensus Estimate of 55 cents.
Schlumberger is expected to see an earnings surge of 68% in 2022. As of Sept 30, 2022, SLB had approximately $3,609 million in cash and short-term investments. It had long-term debt of $12,452 million at the end of the third quarter.
Helmerich & Payne Inc. (HP - Free Report) is a major land and offshore drilling contractor in the western hemisphere, having the youngest and most efficient drilling fleet. HP’s fiscal third-quarter 2022 adjusted profit of 27 cents per share beat the Zacks Consensus Estimate of 5 cents.
Helmerich & Payne is expected to see an earnings surge of 277.8% in 2022. HP boasts a strong balance sheet, carrying $542.3 million in long-term debt. The company’s debt-to-capitalization stands at just 16.6% compared with many of its peers that are hugely burdened with debts.
Patterson-UTI Energy (PTEN - Free Report) is one of the largest North America land drilling contractors, having a large, high-quality fleet of drilling rigs. PTEN’s third-quarter 2022 adjusted net profit of 28 cents per share beat the Zacks Consensus Estimate of 19 cents.
Patterson-UTI is expected to see an earnings surge of 128% in 2022. PTEN doubled its quarterly cash dividend to 8 cents per share from the previous 4-cent payout. The dividend will be paid out on Dec 15, 2022, to shareholders of record as of Dec 1, 2022. PTEN also increased its share repurchase authorization to $300 million.