The Most Dangerous Dividend Stock That Everyone Owns

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If you were burned by investing in GE (General Electric) over the last year, you'll definitely want to check out this video, where I discuss what I believe to be the most dangerous blue-chip dividend stock.

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[Leconte.]

Thanks Matt, Wow...I bought XOM just this week for long term dividend hold. Thinking the price has dropped, yield is looking good, and Company is an oil major being a DOW JONES component. This video shows I got work to do in my stock selection process where long term hold is concern. I've become proficient in short-term trading thanks to you. Now I'm adding more arsenal to my investing repertoire.
I'm cancelling my good-till-cancel order on XOM on Monday.
Trader University ALL the way.

[kingston]

Thanks for the advice. I'll definitely be checking these indicators before investing long term in a stock. And I'm going to check the ones I currently have in my portfolio.

[TBradFashionModel]

Well, along with XOM, how about COP, OXY, HAL, SLB,

[andrewmartin]

That reminds me of the old company General Motors that went bankrupt. They paid dividends with borrowed money too.

[nicholasfpratt]

This is a very interesting financial analysis of XOM’s past performance but doesn’t seem to take into account the recent positive trends, the cyclical nature of the energy business, or the very high capital expenditure requirements of oil exploration.




As it stands oil price increases and a surging economy are a fortunate turn of events that seem to be creating a positive business outlook.

XOM’s near-term fundamental trends are very positive. XOM FCF grew from 5, 919 in 2016 to 14, 664 in 2017 which exceeded the dividend payment and share repurchase by 916 million. That’s a very positive near-term trend.


“Bulls argue the company hasn’t lost its ability to find and develop enormous energy deposits profitably. Exxon, they contend, can exploit what it calls its “strongest portfolio of opportunities” since the merger of Exxon and Mobil in 1999.

The five major opportunities are deepwater oil projects off the coasts of Guyana and Brazil, huge natural-gas fields and associated liquefied-natural-gas plants in Mozambique and Papua New Guinea, and oil and natural gas in the Permian basin of Texas and New Mexico, the hottest energy-producing region in the U.S.

Exxon is particularly excited about an offshore Guyana field that is estimated to hold more than three billion barrels of oil equivalent. The crude is expected to start flowing to market in 2020, and output is projected to reach about 500, 000 barrels a day by 2025. Analysts say the Guyana field, in which Exxon holds a roughly 45% stake, is one of the most lucrative new energy discoveries in the world.”

Value Line supports this idea by anticipating strong business growth to revenue of 400 billion, EPS of 8.00, P/E of 14 in the 2021-2023.

Integrated oil and gas companies take time to reflect the benefits from higher oil prices through their operations. Barring a significant oil price decline I expect to see steadily accelerating fundamental performance and share price growth for several years leading to a plateau then a decline when the oil price trend changes. The main risks are a steep decline in oil and gas prices, a de-stabilizing event like a war or global natural disaster, or a stock market crash. If you look back to the 2008/9 financial melt down XOM share prices were barely affected so this risk seems low-probability as long as the company is performing well.

That’s my analysis but I’m all ears. What do you expect to change the positive near-term FCF numbers? Increased capital expenditures? Upstream investments that don’t pan out? Lower oil prices?