Money and Finance
Earlier this month, Exxon Mobil (NYSE:XOM) reported Q4 2015 earnings which, as expected, looked ugly considering the large decline in the price of oil over the last one and a half years. Exxon Mobil has long been one of the largest repurchasers of shares, spending a net of $89.74B on share buybacks during the 2010 through 2015 period. However, during the Q4 earnings release, management stated that share buybacks were being halted, presumably to preserve cash.
Given the current state of the "patch", I don't think you'll find anyone that would argue with management's decision. Management was left with three choices:
The balance sheet had already seen a significant deterioration, with total debt increasing over 150% between the end of fiscal year 2010 and the end of fiscal year 2015. Adding additional debt in order to cover both share buybacks and the dividend didn't make sense.
That left door number three: stop the share buybacks. It's a quick and easy way to preserve cash and doesn't carry anywhere near the same weight in the eyes of shareholders as a dividend cut.
Continue reading the article on Seeking Alpha.
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Money and Finance
Exxon Mobil's Dividend Could Be In Danger
Earlier this month, Exxon Mobil (NYSE:XOM) reported Q4 2015 earnings which, as expected, looked ugly considering the large decline in the price of oil over the last one and a half years. Exxon Mobil has long been one of the largest repurchasers of shares, spending a net of $89.74B on share buybacks during the 2010 through 2015 period. However, during the Q4 earnings release, management stated that share buybacks were being halted, presumably to preserve cash.
Given the current state of the "patch", I don't think you'll find anyone that would argue with management's decision. Management was left with three choices:
- Reduce/stop share buybacks
- Cut the dividend
- Leverage up the balance sheet even more
The balance sheet had already seen a significant deterioration, with total debt increasing over 150% between the end of fiscal year 2010 and the end of fiscal year 2015. Adding additional debt in order to cover both share buybacks and the dividend didn't make sense.
That left door number three: stop the share buybacks. It's a quick and easy way to preserve cash and doesn't carry anywhere near the same weight in the eyes of shareholders as a dividend cut.
Continue reading the article on Seeking Alpha.
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One of my goals for the year was to increase the amount of capital I have invested in consumer staples companies. I like the consumer staples because of the fact that their businesses are rather boring and don't fluctuate much based on the state...
- Can A Total Shareholder Yield Etf Work?
A rare mid-week post, but earlier today I read an interesting article on Forbes about the Cambria Shareholder Yield ETF (SYLD), which was based on an interview with the Cambria CIO. So I decided to dig into the story a little this evening. The SYLD...
- Should More Companies Adopt Flexible Dividend Policies?
In the U.S. and U.K. markets, the most common form of dividend policy is one that aims to pay at least the same amount year after year, regardless of the company's performance that year. I'll call this the "consistent" dividend policy. In such...
- Dividend Compass Cup Match 10 - Exxon Mobil Vs Wal-mart
Here in match 10, we are in the second round of the Dividend Compass Up, the winner will go on to the Final four. We have two formidable companies, with real earnings power- a Texarkana border battle - Exxon Mobil vs Wal-mart. The Dividend Compass Cup...
- June Dividend Update
Happy 4th of July for those of you in the USA. Time for my June update. This months dividend total was a new record high for me at $288.03 which is up 14% from the $252.03 that I made last quarter in March. In comparison, last years June total was $227.91...