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Exxon Mobil Corporation Stock Buy Recommendation Reiterated (XOM)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Exxon Mobil Corporation (NYSE:XOM) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, compelling growth in net income, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 26.62%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Regarding the stock's future course, although almost any stock can fall in a broad market decline, XOM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 49.0% when compared to the same quarter one year prior, rising from $10,680.00 million to $15,910.00 million.
  • XOM's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.74 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, EXXON MOBIL CORP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.

Exxon Mobil Corporation engages in the exploration and production of crude oil and natural gas, and manufacture of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products. The company has a P/E ratio of 9.7, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Exxon Mobil has a market cap of $425.68 billion and is part of the basic materials sector and energy industry. Shares are up 8.8% year to date as of the close of trading on Friday.

You can view the full Exxon Mobil Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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