Here's Why We Think Exxon Mobil (NYSE:XOM) Is Well Worth Watching

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Exxon Mobil (NYSE:XOM). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Exxon Mobil with the means to add long-term value to shareholders.

Check out our latest analysis for Exxon Mobil

Exxon Mobil's Improving Profits

In the last three years Exxon Mobil's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. So it would be better to isolate the growth rate over the last year for our analysis. Exxon Mobil's EPS skyrocketed from US$9.14 to US$13.05, in just one year; a result that's bound to bring a smile to shareholders. That's a fantastic gain of 43%.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. While we note Exxon Mobil achieved similar EBIT margins to last year, revenue grew by a solid 3.7% to US$368b. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Exxon Mobil?

Are Exxon Mobil Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a US$435b company like Exxon Mobil. But we are reassured by the fact they have invested in the company. Notably, they have an enviable stake in the company, worth US$443m. This comes in at 0.1% of shares in the company, which is a fair amount of a business of this size. This should still be a great incentive for management to maximise shareholder value.

Does Exxon Mobil Deserve A Spot On Your Watchlist?

For growth investors, Exxon Mobil's raw rate of earnings growth is a beacon in the night. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Exxon Mobil's continuing strength. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it's a good stock to follow. You should always think about risks though. Case in point, we've spotted 1 warning sign for Exxon Mobil you should be aware of.

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.