Exxon Mobil Corporation fell drastically on Friday. It sold off to a nine-year low after missing fourth-quarter 2019 EPS expectations by $0.04. Though it tried to attract investors with the promise of a 5.60% forward dividend yield, the company continued downfall during the last years. In the past nine quarters, the Dow Jones component missed estimates six times, including this month.
The energy giant’s revenues fell 6.6% over the years to $67.17 billion. And the stock declined by a whole 15% in the third quarter of 2019. It tried to apply a restrictive program to build cash flows during the longest period in U.S. history. Moreover, due to the coronavirus outbreak, analysts expect that the revenue will decrease again in the first quarter of 2020.
Exxon Mobil experienced a strong rally during the mid-decade bull market. But it stopped in the mid-$80 in 2007. After that, the stock tried unsuccessfully to break out several times until 2007, when it hit an all-time high at $104.76. After that, it has been falling gradually.
What About Exxon Mobil’s Rival, Chevron Corporation?
Chevron Corporation also reported a 14.2 % revenue decline last week. But so far, it managed to hold above the December 2018 low. Cowen also noted about this stock’s decent on Monday. Such a downfall was largely caused by changing political headwinds. They have already dropped the Dow’s two energy plays to the bottom of the component performance list. But as the political headwinds continue to grow, they could affect these stocks’ value for many years in the future.
European climate activists are trying to make hedge funds to drop 100% of their traditional energy holdings. Furthermore, several Democratic candidates want to reduce fossil fuel use by taxing the industry heavily. Such pressure isn’t good news for these stocks, especially considering that it will likely grow through the decade. It seems, the impact of global warming and rising seas makes such radical solutions seem more easily acceptable.