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The only thing that's going to reassure the market is a concrete plan of action, but Exxon's oil major peers have set the bar pretty high by announcing spending cuts of around 20% each. Speaking at ExxonMobil's annual investor day on March 5, CEO Darren Woods announced that the company would be "leaning into this market when others have pulled back," to the tune of $30 billion to $35 billion in annual spending. In recent months Shell has announced the suspension of several projects and has shut down or reduced production at its U.S. refineries. In addition, Shell and Chevron have suspended their share buyback programs, which ate up billions of dollars of cash flow in 2019. The Western Hemisphere’s largest oil company was slammed by Covid-19 lockdowns that obliterated energy demand and forced Exxon to scale back an ambitious investment program. On March 16, S&P Global downgraded Exxon's credit rating from AA+ to AA: still investment-grade, but a signal of the market's discomfort with the prospect of rising debt. There is something else to consider: XOM stock has a dividend yield of 8.5%. Before now, Exxon had an uninterrupted streak of April increases going back to 2007. Here's why Exxon's in a risky spot, and why that could cause problems for its dividend. However, Woods is clearly eager to follow the time-tested Exxon playbook of spending money throughout the cycle, regardless of oil prices. Together with the $31.1 billion in capital and exploration, that totaled $45.8 billion. For more information on dividend payment options, call: ExxonMobil Shareholder Services. Would cutting just $6 billion from its capital budget be enough to secure Exxon's dividend? The median dividend of the 30 Dow Jones industrial average stocks is closer to 3.0%, without counting the suspended dividends at Boeing and Disney. Almost immediately, Exxon put out a press release vowing to look into "all appropriate steps to significantly reduce capital and operating expenses in the near term.". Updates with analyst’s comment in fifth paragraph. In all likelihood, he's going to try to gauge exactly how much (or how little) he needs to cut to satisfy the market and announce only that much and nothing else. But Rowland warned in a July 31 note that Exxon is at risk of cutting its dividend on Friday if it feels the demand will remain at 20% below last year levels. The current TTM dividend payout for Exxon (XOM) as of December 31, 2020 is $3.48 . So, anything less than a 20% reduction in capital spending will probably be seen by the market as a disappointment, and is likely to lead to a share price decline. Unlike rivals such as Royal Dutch Shell Plc and Total SA that are saving cash by crimping share buybacks, Exxon sacrificed those during the last crash in 2016. Would cutting just $6 billion from its capital budget be enough to secure Exxon's dividend? Why ExxonMobil, ConocoPhillips, and Chevron Stocks Hit a Gusher on Tuesday, Why ExxonMobil Stock Lost More Than 40% in 2020, ExxonMobil to Take $20 Billion in Upstream Charges in Q4, 3 Stocks That Can Pay You More Than Social Security Benefits, Copyright, Trademark and Patent Information. Exxon is going to have to come clean about its specific 2020 spending plans -- and sooner rather than later. Either way, ExxonMobil seems likely to continue to maintain its status as a Dividend Aristocrat, provided the current economic situation doesn't drag on for too many months. Cumulative Growth of a $10,000 Investment in Stock Advisor, Can ExxonMobil's Dividend Survive the Combined Coronavirus-Oil Price Bust? After trimming capital spending, Exxon had few levers left to pull to protect the dividend. That announcement seemed to slow the pace of the company's share-price decline. Exxon will pay 87 cents a share in June, unchanged from March’s outlay, the Irving, Texas-based company said in a statement on Wednesday. • WD-40 (WDFC) suspended its stock-buyback plan but its regular dividend of 67 cents a share is due to be paid April 30 to stockholders of record on April 17. The next Exxon Mobil Corp. dividend is expected to go ex in 1 month and to be paid in 2 months. “Dividend cuts are inevitable,” says Richard Bernstein, CEO of Richard Bernstein Advisors. That almost certainly would have involved outspending the company's cash flow at times. It has dropped 27% over the past month, generally in line with the broader market, and the yield on the fund has slipped to 2.6%. Shell is cutting an estimated $8 billion to $9 billion in capital and operating expenses in 2020; Chevron similarly promised a $5 billion reduction in spending; Total is cutting $800 million. Exxon (NYSE:XOM) pays $3.48 per share in dividends to its shareholders. The stock market is getting impatient with ExxonMobil (NYSE:XOM). Exxon raised $23 billion in debt earlier this year, providing liquidity to fund its dividend for the next several quarters. I just read that Tanger Factory Outlets (SKT) is suspending dividends.That's after increasing the dividend in February 2020.This is what I obtained about the dividend from the company's press release: Tanger intends to pay the dividend of $0.3575 per share declared in January 2020 as scheduled on May 15, 2020 to holders of record on April 30, 2020. The current RDS dividend rate was at 92% of the 2019 basic earnings per share. Dividend stocks have traditionally been coveted by investors because they provide guaranteed returns to shareholders, typically paid out annually out of the company’s profits or reserves. Coming to the dividend, it remains an integral part of Chevron’s plans. XOM Dividends Get information about Exxon Mobil dividends and ex-dividend dates. Stock Advisor launched in February of 2002. In early February, Barron’s wondered if Exxon Mobil would cut its dividend after raising it for 37 consecutive years. So, even a $6 billion reduction in capital expenditures would still leave Exxon -- assuming oil prices were comparable to last year's -- with a $10 billion hole to fill. Shell’s next scheduled dividend announcement is in early May. Image source: Getty Images. In contrast to European majors Royal Dutch Shell and BP, both of whom lowered their dividends… 13 Dividend Stocks That Have Paid Investors for 100+ Years Here are 13 dividend stocks that each boast a rich history of uninterrupted payouts to shareholders that stretch back at least a century. It made up the difference primarily through $3.7 billion in asset sales and an $8.7 billion increase in net debt. Norway’s Equinor ASA became the first large oil company to cut dividends amid an historic, virus-drive market rout. That $5.9 billion in net cash flow in the second quarter covered Exxon’s $3.7 billion in shareholder distributions. General Motors suspends dividends and share buybacks to preserve cash General Motors said Monday it is suspending its quarterly dividend and … In response, the market sent their shares soaring. So, there’s no need to cut the dividend. Chevron, which traces its roots to 1879, hasn't cut its dividend since 1934 during the Great Depression. Find quality, dividend-paying companies, invest in them and reinvest any dividends to accelerate returns. If it does, ExxonMobil -- and the oil industry in general -- will have bigger problems than just a potential dividend cut. And, of course, oil prices today are much lower than they were at any time during 2019, which means that hole is likely to be much larger than $10 billion. However, Exxon's current debt load of $45.3 billion, although record high for the company, equates to less than 1.1 times EBITDA, which is on the low end of its peer group (only Chevron's debt-to-EBITDA ratio of 0.9 is lower). Yields Amid Georgia Run... Biggest Indian Lender to Power Firms Plans Retail Investor B... SoftBank Group Plans to Sell First Bond in More Than a Year. The company would likely have no problem securing financing to maintain its dividend. Will the dividend be cut? How much would satisfy the market? Exxon paid out the S&P 500's third-largest dividend in the last quarter. Dividend Summary. The company has grown its dividend for the last 13 consecutive years and is increasing its dividend by an average of 4.80% each year. Dividend Channel - Wednesday, December 30, 12:39 PM. There were 61 dividend increases, and only two dividend cuts and one dividend suspension. That's been a winning strategy for the company in the past, which makes it uncertain how much cutting Woods will be willing to do. Personally, I would expect a dividend cut on Friday and quite possibly a round of layoffs. Market data powered by FactSet and Web Financial Group. But the company has … “Dividends are a function of cash flow, and cash flows will undoubtedly come under intense pressure.” Boeing Co. BA -1.20% said it would suspend its dividend for shareholders, joining a growing number of U.S. companies trying to save cash amid the coronavirus crisis. But more than a week later, Exxon is still being coy about exactly what cuts -- if any -- it plans to make. On the other hand, in the unlikely event the company surprises with, say, a spending cut of $10 billion (about 27%) or more, investors will probably send shares upward. True, with such a high level, there is often a cut. There are typically 4 dividends per year (excluding specials), and the dividend cover is approximately 1.1. April 8 … For the latest news and analytics surrounding volatile crude prices, click here. Before today, Exxon was the third-largest dividend payer in the S&P 500 Index behind Microsoft Corp. and AT&T Inc., according to data compiled by Bloomberg. Most analysts expected the world’s largest Western supermajors, including Exxon, to defend their dividend at almost any cost given how important the payouts are to North American investors. Find the latest dividend history for Exxon Mobil Corporation Common Stock (XOM) at Nasdaq.com. Commodities Billionaire Came Within Weeks of a Debt Crunch, NYSE’s Second-Guessing on China Delistings Sows Confusion. The company's current cash on hand of $3.1 billion won't be much help here. That said, moves that placate the market -- which can pay off in the short term -- may not be the best long-term strategy, for Exxon right now or for companies in general. The dividend … JPMorgan Says Bitcoin Could Surge to $146,000 in Long Term, NYSE Abruptly Reverses Plan to Delist Three Chinese Telecoms, China Sentences Ex-Finance Chief to Death on Corruption, China’s Bottled Water King Is Now Richer Than Warren Buffett, Treasury Yields Reach 1%; Nasdaq Futures Tumble: Markets Wrap. XOM Dividend History & Description — Exxon Mobil Corp. Exxon Mobil operates or markets products in United States and other countries through its divisions and affiliated companies. So the dividend yield for XOM stock is 9.8%. General Motors announced Monday morning that it would be suspending its dividend to preserve cash as its factories are shut down due to the coronavirus pandemic. Even if the company maintains quarterly payouts at the current level for the rest of 2020, the annual outlay will be $3.48 a share, or 1.5% above 2019. The payout is “secure” because the company has capacity to take on debt to fund it, she said. Returns as of 01/06/2021. Historical dividend payout and yield for Exxon (XOM) since 1989. Could that trend be about to end? Fellow oil majors Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B), Total SA (NYSE:TOT), and Chevron (NYSE:CVX) have all released plans to sharply reduce 2020 capital spending in the wake of the oil price crash. Investors didn't think much of that idea, and the company's shares have fallen more than 25% since March 5. The current dividend yield for Exxon as of December 31, 2020 is 8.44% . Co.'s business involves exploration for, and production of, crude oil and natural gas and manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and other products. ExxonMobil has reliably increased its dividend for decades. So far, not. He seeks growth and value stocks in the U.S., in Germany, and beyond! The dividend suspension was from Ross Stores (ROST), which had just joined the index at the beginning of 2020. The company paid out $14.7 billion in dividends … Bond Traders Lean Toward Higher U.S. Exxon Mobil pays out 154.67% of its earnings out as a dividend. Have a confidential tip for our reporters? Before it's here, it's on the Bloomberg Terminal. So Long, Dividend Aristocrats! @themotleyfool #stocks $XOM $RDS.A $CVX $RDS.B $TOT, cutting an estimated $8 billion to $9 billion in capital and operating expenses. Contains profiles, news, research, data, and ratings for thousands of dividend-paying stocks. Trump Launches Plan For Black America, With Some Holes However, Norway's Equinor – due to publish its quarterly financials on May 7 – cut its first-quarter dividend by 67% … As a DividendMax member, you’ll benefit from the knowledge of our highly-experienced analyst team. 42 companies suspended dividends; You can see the performance by sector broken out in the chart below: It is fascinating to look at how the S&P Dividend Aristocrats did in 2020. If it comes out with anything less than a 20% reduction in capital spending, the market is likely to punish the stock. However, the company only brought in $29.7 billion in operating cash flow, $16.1 billion less than those two expense categories. On an annualized bases, the dividend will cost Exxon almost $15 billion this year. Global Water Resources, a pure-play water resource management company, has declared, under its dividend policy, a monthly cash dividend in the amount of $0.02434 per common share, which will be payable on January 29, 2021 to holders of record at the close of business on January 15, 2021. Many of Exxon's peers -- also with solid balance sheets and credit ratings -- quickly announced 2020 spending cuts to reassure investors that their dividends would be … Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. “It’s definitely a sign of the times and to be expected given the price environment,” said Jennifer Rowland, an analyst at Edward D. Jones & Co. You can create your own portfolio to track upcoming monthly dividend payments and identify your best-performing holdings. Despite its recent credit downgrade, it maintains a rating of Aaa/AA, which is still very high. Before oil prices collapsed in early March, all of the oil majors were planning to increase capital spending in 2020 over their 2019 levels. Exxon Mobil Corp. froze its dividend for the first time in 13 years as the lowest oil prices in a generation strain the company’s financial underpinnings. The company paid out $14.7 billion in dividends in 2019. The previous Exxon Mobil Corp. dividend was 87c and it went ex 2 months ago and it was paid 25 days ago. XOM's most recent quarterly dividend payment was made to shareholders of record on Thursday, December 10. So a 20% cut would be roughly $6 billion. Exxon Mobil Corp. froze its dividend for the first time in 13 years as the lowest oil prices in a generation strain the company’s financial underpinnings. Profits will crash in 2020, putting the dividend at risk. The freeze may not derail Exxon’s multi decade streak of annual increases. Dividend Reinvestment: You may automatically reinvest all or part of your dividends in additional shares of ExxonMobil stock through the Computershare Investment Plan for ExxonMobil Common Stock. Enough to save the dividend. Over the week between March 19 and 25, their share prices rose between 25.8% (Chevron) and 68.8% (Shell's Class A Shares). John has found investing to be more interesting and profitable than collectible trading card games. Well, Exxon spent $31.1 billion in capital and exploration in 2019, which was a 20% increase from 2018's $25.9 billion. Exxon, on the other hand, saw shares rise just 12% during that period. Will $50 Oil Keep the Bull Market Running in 2021? Exxon, which has struggled in recent years with declining production, was particularly keen to spend. The most comprehensive dividend stock destination on the web. Asia Stocks See Muted Start Before Georgia Results: Markets... 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