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Exxon's Conundrum


If you were a stock holder, would you rather have a buyback, or a dividend?

If you own Exxon Mobil ,  you probably want the latter.

The company sits on a mountain of cash and has decided to use much it to repurchase its stock. But so far, that has failed to meaningfully move the stock. In the last six months, oil has risen some 43%, while Exxon stock has registered a scant 3% rise. That's not so unusual according to industry watchers. Integrated names tend to underperform oil to the upside, and outperform it to the downside. On the year, oil is down 29% on the year, while Exxon has only fallen 14%. More interesting is the relative underperformance to its peers. While the S&P is up 17% year-to-date, Exxon is down 14%, and the integrated space is up 2%. And some point the finger squarely in the direction of management.

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