Passive income investing is a way to earn steady income by investing in businesses that continue to pay dividends to shareholders. A company that has increased its dividends to investors over the long term is Exxon Mobil (NYSE: XOM)its annual dividend payments have increased for 43 consecutive years.
Based on ExxonMobil’s current dividend yield of 2.7%, you would receive $273 in annual dividend payments for every $10,000 invested. If this sounds appealing to you, here’s what you need to know about investing in ExxonMobil.
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ExxonMobil is a giant in the oil and gas industry. The company has an integrated business model that includes upstream operations such as exploration and drilling, and downstream operations that convert raw materials into fuels, petrochemicals, plastics and more.
The oil and gas giant is aggressively shifting its portfolio toward so-called advantaged assets, which have low production costs and high returns; these products are expected to account for 65% of its upstream production by 2030, up from 59% in 2025.
The company also uses technology to extract more value from similar resources than its competitors. In the Permian Basin, for example, the company uses cube development, drilling multiple wells simultaneously to maximize recovery. It also uses a proprietary lightweight proppant that helps improve economics and increase drilling efficiency. The proppant technology will be used in 25% of its wells by 2025 and is expected to be used in 50% of its wells by the end of 2026.
Another advantage of ExxonMobil is its size. Its centralized global projects organization executes an average of three times the number of large projects as its nearest competitor, helping it reduce costs. Since 2019, these efforts have helped ExxonMobil achieve cumulative structural cost savings of $15.1 billion.
Production from the Permian Basin reached a record 1.6 million barrels of oil equivalent per day. Looking ahead, CEO Darren Woods said that “simply put, we are not going to have a near-term Permian peak” and that project production could exceed 2.5 million barrels of oil equivalent per day by 2030 due to continued improvements in drilling productivity and improved recovery efficiencies.
Exxon Mobil is an oil and natural gas major and may be affected by fluctuations in spot prices for these commodities. However, it does an excellent job of managing its balance sheet and investing in highly productive, high-performing wells and related technologies. Its investments in low-cost assets generate strong returns and remain profitable even as oil prices fall, and it looks set to continue rewarding dividend investors for years to come.
