Is Exxon Mobil (XOM) the Low Volatility Stock to Buy According to Billionaire Ken Fisher?

Ladies and gentlemen, buckle up! We're diving into the world of energy stocks, and today, we're focusing on one of the giants: Exxon Mobil (XOM). You might be wondering, "Is Exxon Mobil the low volatility stock to buy according to billionaire Ken Fisher?" Let's find out!

First things first, let's talk about Ken Fisher. This guy is a legend in the investment world. He's all about long-term investment and behavioral finance. He believes in holding onto stocks for the long haul and understanding the emotional and psychological factors that drive market movements. So, how does Exxon Mobil stack up against Fisher's philosophy?



Exxon Mobil's Long-Term Performance

Exxon Mobil has shown consistent long-term growth. Over the past 5 years, the total return for Exxon Mobil stock is a whopping 108.82%! That means if you had invested $100 in XOM stock 5 years ago, you'd have $208.82 today. THAT'S THE POWER OF LONG-TERM INVESTING, FOLKS!

Behavioral Finance and Exxon Mobil

Ken Fisher emphasizes the importance of behavioral finance. He believes that understanding investor sentiment and market cycles can help you make informed decisions. Exxon Mobil's stability and low volatility make it a great fit for this philosophy. The company's strong fundamentals and consistent performance can help mitigate the emotional and psychological factors that often lead to irrational market movements.

Cash Flow Focus

Fisher is all about cash flow. He believes that a company's ability to generate positive cash flow is an essential indicator of its health and potential for growth. Exxon Mobil has a strong cash flow history. In 2024, the company generated $55.0 billion in operating cash flow and $34.4 billion in free cash flow. THAT'S A LOT OF CASH, FOLKS!

Diversification and Risk Mitigation

Fisher advocates for diversification to mitigate risks while enhancing returns. Exxon Mobil's diversified business model, which includes exploration for, and production of, crude oil and natural gas; manufacturing, transport and sale of petroleum products, petrochemicals, and a variety of specialty products; and pursuit of lower-emission business opportunities, aligns with Fisher's philosophy of diversification. This diversification helps mitigate risks associated with any single sector or product, making it a stable investment option.

Specific Metrics and Financial Indicators

Now, let's dive into the specific metrics and financial indicators that Ken Fisher would likely use to evaluate Exxon Mobil's potential as a low volatility investment.



Cash Flow and Dividend Yield

Exxon Mobil's strong cash flow generation supports its dividend payments, which have been consistently increasing. Exxon Mobil's dividend yield is 3.33%, which is attractive compared to many other energy sector stocks.

Return on Capital Employed (ROCE)

Exxon Mobil's ROCE was 12.7% for the year 2024. This metric indicates how efficiently the company is using its capital to generate profits. Exxon Mobil's ROCE is higher than that of some of its competitors.

Debt-to-Capital Ratio

Exxon Mobil's debt-to-capital ratio was 13% in 2024, which is relatively low compared to industry averages. A lower debt-to-capital ratio indicates that Exxon Mobil has a stronger financial position and is less leveraged, which can be a positive indicator for low volatility.

Earnings Stability

Exxon Mobil's earnings have shown resilience, with a 5-year total return of 108.82%, which is in the top 25% of its industry. This stability is reflected in its consistent earnings growth and the ability to navigate market fluctuations.

Price-to-Earnings (P/E) Ratio

Exxon Mobil's P/E ratio is 14.88, which is relatively low compared to the broader market and some of its peers. A lower P/E ratio can indicate that the stock is undervalued, which could be attractive for long-term investors seeking low volatility.

Market Capitalization

Exxon Mobil's market capitalization is $513.19 billion. This large market cap indicates stability and liquidity, which are important for low volatility investments.

Conclusion

So, is Exxon Mobil the low volatility stock to buy according to billionaire Ken Fisher? Based on the metrics and financial indicators we've discussed, the answer is a resounding YES! Exxon Mobil's strong cash flow, attractive dividend yield, efficient capital utilization, low debt-to-capital ratio, earnings stability, reasonable P/E ratio, and large market capitalization make it an attractive option for investors seeking low volatility. So, what are you waiting for? BUY NOW!