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Exxon Mobil Exit Plan I’ve been luck to buy stocks of Exxon mobile at around $38 in 2020 and have been holding them since purchase with dividends reinvested. So far it has been great and my average price as of now is around $41. Is there a point to keep holding them with price now hovering $150+? Don’t need the money right now but concerned if there is any growth in next 5 years that would outperform the market. Thank you!
Congratulations on a 265% gain (from $38 to $150+). You've captured the full energy recovery cycle.
XOM has delivered 146% total return over 5 years vs 79% for the S&P 500 — a massive outperformance. But the easy money is behind you. The stock is no longer a distressed asset trading at $38; it's now a mature, fairly-valued cash cow at $150.
Key Forward-Looking Concerns:
Valuation Reset: XOM traded at crisis-level multiples in 2020. Today it's priced as a stable utility-like energy firm. The 4x price appreciation reflects normalization, not a structural growth story.
Growth Trajectory: Management targets $25B earnings growth by 2030 (vs 2024 baseline), translating to ~12% annual EPS growth. That's slower than the S&P 500's historical average and heavily dependent on oil staying above $60/bbl.
Capital Allocation Squeeze: Free cash flow has compressed from $58B (2022 peak) to $24B (2025) due to rising capex. XOM is spending 55% of operating cash flow on reinvestment — up from 25% in 2021. This limits dividend growth and buyback capacity going forward.
Commodity Cycle Risk: Oil is currently near $65/bbl with analysts warning of a multi-year glut due to EV adoption and oversupply. XOM can survive at $60/bbl, but margins will compress further.
Energy Transition Uncertainty: The $30B low-carbon bet (carbon capture, hydrogen) is a long-term hedge, but these projects are capital sinks today with uncertain ROI. If oil prices stay weak AND these ventures underperform, shareholder returns suffer.
Over the next 5 years, XOM is unlikely to outperform a diversified S&P 500 index unless:
The S&P 500 offers broader exposure to secular growth sectors (tech, healthcare) without commodity volatility.
XOM remains a high-quality income vehicle with a 2.7% dividend yield (43 years of increases) and a fortress balance sheet. If you value stability and income, holding makes sense. But if your goal is capital appreciation and market-beating returns, the risk/reward has shifted. The stock is priced for operational excellence — any stumble on the 2030 targets would be punished.
Given your cost basis of $41, you have massive embedded gains. The question isn't "Is XOM a good company?" (it is), but rather "Is this the best use of capital for the next 5 years?" The data suggests XOM will likely match or lag the S&P 500 going forward, not beat it by 60+ percentage points like it did from 2020-2026.
What's your primary goal — income stability or growth?
This response may contain financial commentary based on historical data and does not constitute investment advice. Past performance is not indicative of future results. Please consult a qualified financial advisor before making investment decisions.