Exxon Mobil (XOM)

(A Top Pick Jan 17/17. Down 6%.) This is a buying opportunity. Fossil fuels are needed, and this company is the best managed, largest and most diversified, so this is a long-term winner. Also, has a 3%+ dividend yield making it one of the higher yielders. (See Top Picks.)

This is an asset play. You are buying it at EBV+3. In 1994/5 you had the same valuation. $84.05 is his model price and it is bang on. This is the best oil stock. (Analysts’ Target: $89.13).

With a 2-year view? With a 2-year view, you could probably buy this. Yields about 3.5%, so you shouldn’t do much worse than that. Technologically it is probably the most advanced oil/gas company, and is well integrated. This is a trading stock. On big oil/gas companies, you ultimately make your money on the production per share basis, i.e. production/shares. This has been producing about 6 million barrels of oil a day for about 10 years. To offset their decline rate, they have to spend so much money, and it costs a lot of money to get it out of the ground. He would prefer a Canadian mid-cap. (See Top Picks)

The ultimate Trump stock. When the president of the company is nominated to become Secretary of State, that can only benefit the company. If energy goes up, the company wins. If energy goes down, this company is going to perform because they are so diversified across the industry and geographically. Dividend yield of 3.45%. (Analysts’ price target is $89.92.)

Trades a little above the model price, but he looks at the price relative to its balance sheet. You have to go back to 1995 to get it at the same valuation as today. This one is one of the best companies in America. (Analysts Target: $89.38).

Trump is interviewing the CEO for Secretary of State. This is the best managed company globally. It didn’t get beat up like a lot of company oil stocks. Going forward this is a great valuation. Dividend yield of 3.45%. (Analysts’ price target is $89.50.)

Model price is $76.01, 9% lower. It is a best managed company. If we have a spike in oil prices look for this one to benefit. The fundamentals are against this company. This is about the cheapest it has been since 1994.

It is fine. Oil and commodity companies are trading as a group this year. If you hold it you are betting on oil. He is neutral.

Large oil/gas favourite? One of her favourites would be Exxon Mobile. They offer an attractive dividend yield. Valuations have become a little more reasonable. A well diversified structure. Good product mix between oil and gas. 3.5% dividend yield.

It is at EBV+3, great dividend. Oil is so out of favour. His model price is $73. You are buying the best company in the world at a cheap price, based on the commodity.

In his estimation, this is the best run company globally. We are in an earnings recession, but this has the best assets globally. This is the cheapest it has traded going back to 1995. Dividend yield of 3.27%.

Because this is an energy name, he doesn’t own it. However, if you are going to own energy, the majors are a nice safe way to play it. Gives you a nice dividend yield and you will probably get a mid-single digit dividend growth.

If you are a believer that the energy market is continuing to stabilize and recover, he likes this company because it is a very conservative play. The largest integrated oil company globally. Feels they are very committed long term to cost control and a strong balance sheet, enabling them to make some very opportunistic acquisitions going forward. Trading at 2.15X Price to BV, which is a discount to its 10-year average of 2.8X. Dividend yield of 3.33%.

His model price of $50 is way below the current trading price, but this is more of an asset play to him. These large cap companies can do a lot. They have a lot of assets and there are a lot of strategic initiatives that they could take to increase shareholder value. Dividend yield of 3.5%.

The smaller players can’t survive. They can acquire assets at cheap prices. They are one of the highest quality names in the space. This is one of the more conservative ways to buy the space.