Updated on March 4th, 2026 by Felix Martinez
Long histories of dividend growth are not typical in the energy sector. The oil and gas industry is highly cyclical, preventing the vast majority of companies from raising their dividends yearly without interruption.
When oil and gas prices are high, energy companies enjoy a windfall that flows through to investors. But when commodity prices decline, profits evaporate, and in some cases, dividends as well.
As a result, there are just two oil stocks on the list of Dividend Aristocrats. One of them, Exxon Mobil (XOM), is the largest oil company in the U.S.
You can download the full list of all 69 Dividend Aristocrats, with important metrics like dividend yield and price-to-earnings ratios, by clicking on the link below:
Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.
Oil and gas can be a “boom-and-bust” industry. Profits are highly dependent on commodity prices, which fluctuate widely in any given year due to supply and demand.
But Exxon Mobil is different. It traces its roots to Standard Oil, which was founded by John D. Rockefeller in 1870.
This article will provide an in-depth look at the founder of Big Oil and a Dividend Aristocrat, Exxon Mobil.
Business Overview
Standard Oil dominated the U.S. oil and gas industry in its early days. It did this with laser-like focus on drilling innovation, production growth, and cost control to beat its competitors. Standard Oil was almost too successful—it grew rapidly that in 1911, it was dissolved by the U.S. Supreme Court on antitrust grounds.
Standard Oil was broken up into 33 smaller companies, many of which became giants on their own, such as Chevron (CVX).
Exxon Mobil operates in three business segments. The Upstream segment includes oil and gas exploration and production. Downstream activities include refining and marketing. Manufactured chemicals include olefins, aromatics, polyethylene, and polypropylene plastics.
Exxon Mobil is one of the largest energy stocks in the world.
Source: Investor Presentation
Oil and gas prices have corrected off their peak, but they remain elevated. As a result, Exxon Mobil could still achieve earnings per share of about $7.00 this year.
Growth Prospects
On January 3oth, 2025, the company reported its fourth quarter and full-year results. In 2025, the company reported full-year 2025 earnings of $28.8B (EPS $6.70) and $30.1B adjusted earnings (EPS $6.99), down from 2024 due to weaker crude prices and chemical margins. Cash flow from operations totaled $52.0B, with free cash flow of $26.1B. The company returned a record $37.2B to shareholders, including $17.2B in dividends and $20.0B in buybacks, while maintaining a low net-debt-to-capital ratio of 11%. Return on average capital employed was 9.3% in 2025 and has averaged ~10.6% since 2019.
Upstream earnings were $21.4B, supported by record production of 4.7 million barrels of oil equivalent per day, the highest in over 40 years, with strong growth from the Permian (1.6M boe/d) and Guyana (over 700,000 gross barrels/day).
Energy Products earnings rose to $7.4B, driven by stronger refining margins and record refinery throughput, while Chemical Products earnings declined to $800M amid weaker industry margins. Specialty Products generated $2.9B in earnings, reflecting resilient demand for high-value products.
Capital expenditures totaled $29.0B in 2025, and the company expects $27–$29B in 2026. ExxonMobil has achieved $15.1B in structural cost savings since 2019, with a target of $20B by 2030, and brought 10 major projects online in 2025, expected to add $3B in earnings at constant prices.
Management emphasized a strengthened balance sheet, disciplined capital allocation, and a long-term growth runway through 2030, supported by advantaged assets and expanded low-cost production.
Nevertheless, given this business’s high cyclicality, it is reasonable to expect a 3% average annual increase in earnings per share over the next five years.
Source: Investor Presentation
Competitive Advantages & Recession Performance
Exxon Mobil enjoys several competitive advantages, primarily its tremendous scale, which allows it to cut costs during tough times. The company is also the global leader in its field, as most oil companies follow the technical procedures that ExxonMobil has written.
Exxon Mobil also has the financial strength to invest heavily in new growth opportunities. In the past few years, the company has allocated tens of billions of dollars in capital expenditures to support future growth.
Another competitive advantage is Exxon Mobil’s industry-leading balance sheet. It has a credit rating of AA-, which helps it keep a low cost of capital.
Exxon Mobil’s integrated business model enables it to remain profitable, even during recessions and periods of low commodity prices. The company saw volatility during the Great Recession but still remained profitable:
- 2007 earnings-per-share of $7.26
- 2008 earnings-per-share of $8.66 (19% increase)
- 2009 earnings-per-share of $3.98 (54% decline)
- 2010 earnings-per-share of $6.22 (56% increase)
Continuing to generate steady profits allowed ExxonMobil to raise its dividend annually. The oil major has raised its dividend for 42 consecutive years.
Valuation & Expected Returns
Exxon’s industry is highly cyclical. Commodity prices drive results, and hence they are highly volatile. We believe the energy market has corrected from its cycle peak and expect oil and gas prices to decline in the coming years, primarily due to the record number of clean energy projects currently under development.
We expect Exxon Mobil to earn about $7.00 per share in 2026 and to experience a 3% average annual increase in earnings per share over the next five years.
The stock is currently trading at a price-to-earnings ratio of 21.4x. This is higher than our fair value estimate of 13 times earnings. A declining earnings multiple could reduce annual returns by 9% over the next five years.
Dividends will add to shareholder returns. Exxon Mobil has grown its dividend for 42 consecutive years and currently offers a 2.7% yield. Given all the above factors, Exxon Mobil stock can be reasonably expected to provide a -3.3% average annual total return over the next five years.
The poor expected return should be expected, given that we are near the peak of this highly cyclical industry’s cycle. We recommend holding Exxon at its current price. The stock’s dividend yield is also near a decade low, another possible signal that the stock is overvalued from a long-term perspective.
Final Thoughts
Exxon Mobil posted record earnings last year thanks to exceptionally favorable global oil and gas conditions. Even better, as these conditions are unlikely to change significantly soon, the oil major is expected to continue thriving in the coming quarters.
Nevertheless, due to this industry’s high cyclicality and elevated valuation, XOM stock is unattractive from a long-term perspective.
Further Reading: The Chowder Rule | How To Calculate The Chowder Number.
Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Dividend Champions: Dividend stocks with 25+ years of dividend increases, including those that may not qualify as Dividend Aristocrats.
- The Dividend Achievers: dividend stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings: considered to be the ultimate dividend growth stocks, the Dividend Kings list is comprised of stocks with 50+ years of consecutive dividend increases
If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:
- The Complete List of Monthly Dividend Stocks: stocks that pay dividends each month, for 12 payments over the year.
- The Blue Chip Stocks List: this database contains stocks that qualify as either Dividend Achievers, Dividend Aristocrats, or Dividend Kings.
The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly: