Today Exxon held its annual analyst day at the New York Stock Exchange, as concerns over low oil prices continue to move the market. Number-one rated integrated oil analyst, Doug Terreson, was at the event. The Evercore ISI analyst joined the "Halftime Report" to discuss the biggest takeaways from CEO Rex Tillerson's speech, as well as where he sees Exxon heading.
Exxon's dividend is safe
Terreson is confident that Exxon will be able to weather the low-priced oil storm. Compared to its peers the company is in a "superior position" because they have done a "better job of managing their capital...and they're in a really strong position from a financial perspective."
Exxon has been building its cash stockpile through cutting capital spending, raising debt, and reducing its share buyback program. This has investors and analysts alike questioning what the company plans to do with its close to $30 billion in cash. Terreson believes that acquisitions are on the horizon. While he acknowledges that it will take a while for Exxon to reach its prior levels, he thinks that consolidation within the industry is the first step.
Anadarko, NRG Energy, and ConocoPhillips are just a few of the energy companies that have slashed their dividend in order to reduce expenditures. This has investors worried if other big oil companies will follow suit. But Terreson believes dividends from Exxon, Chevron, and BP are safe. He thinks it would "take a lot" for these companies to cut their dividend. "If we have $15 to $20 oil for a period of time" it might happen, although in that scenario Terreson believes there would ultimately be "bigger problems."
Trader disclosure: On March 2, 2016 the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Halftime Report" were owned by the "Halftime Report" traders:
Josh Brown: Long AAPL, BABA, DE, DNKN, JMBA, LOW, LNKD,SAM, SHAK, SPWR, TWTR, XLE, XON
Jon Najarian: Long ABX, DISC, FDX, FXI, GDX, GDXJ, SCTY. Long calls AET, BWLD, CA, CY, FIT, JNJ, KATE, IP, MCD, MDLZ, MGM, MSFT, MYL,NEM, RCL, RLGY, SCHW, STO, SWHC
Pete Najarian: Long AAPL, BAC, BMY, DIS, DISCA, GE, KMI, KMI-A, KO, MRK, PEP, PFE, SAVE, VIAB. Long calls AAL, AMJ, BAC, BHP, DAL,FDX, GDX, GE, HAIN, HBAN, LC, MDLZ, MPZ, NRF, POT, RHT, SLV, SWN, UAL, USG,WMB, WYNN, ZIOP. Long puts DB, EWH, RIG, VLO
John Spallanzani: AXP, BAC, BBRY, C, DSEEY, EWZ, F, FNMA, FXI,GDX, HTZ, ICA, IWM, MFG, MS, MTU, NMR, QQQ, SPY, SWHC, TWTR, VMW, XME