There are many income investors who are wary of ultra high yield paying dividend stocks. How can the company sustain the payout and are they risking their initial capital by chasing the high yield. And, fair enough, there are a lot of terrible high yield dividend stocks. That’s why we avoid those here at IncomeInvestors.com.
Having said that, there are also a lot of risk averse investors who want a high yield dividend stock with limited downside risk. If you’re looking for an energy stock that provides investors with exceptional long-term capital appreciation and a reliably growing annual dividend, it’s tough to beat Exxon Mobil Corp (NYSE:XOM).
With a market cap of $669 billion and ubiquitous global presence, chances are good you know what ExxonMobil Corp does. The Irving, Texas company is an integrated oil and gas giant that explores for, produces, and refines oil in 56 countries around the world. (Source: “Investor Presentation,” ExxonMobile, February 20, 2026.)
In 20255, the company’s net production hit 4.7 million barrels of oil equivalent per day, the highest level in more than 40 years. At the end of 2024, total probably reserves were 19.9 billion barrels of oil equivalent, 69% of which were liquids. The Permian Basin has over 18 billion barrels of oil equivalent; that number was boosted by the 2023 $59.5 billion acquisition of Pioneer Natural Resources.
Worldwide, ExxoMobil markets fuels, lubricants and chemicals under four brands: Esso, Exxon, Mobil, and ExxonMobil.
While many of its peers are announcing new strategies to divert investment to renewables, ExxonMobil is committed to oil and gas. And why not, it’s served the company well for decades. And is expected to for decades more.
The energy landscape continues to evolve as demand grows. By 2050:
- Developing countries are projected to use 25% more energy as living standards improve
- More than 50% of energy supply will comes from oil and natural gas, making it the largest energy sources
- Global electricity demand expected to grow 70%
- Global CO2 emissions are projected to decline by 25%
Will this help Exxon win any awards from Greenpeace? Probably not, but it will continue to be a winning strategy for shareholders, the company’s share price, and dividends.
Record Production Helps Exxon Beat Expectations
Despite lower oil prices in 2025, record production helped Exxon report better than expected earnings. It reported fourth quarter earnings of $6.5 billion, or $1.53 per share. Earnings excluding identified items, earnings were $7.3 billion, or $1.71 per share. That topped Wall Street calls for earnings of $1.70 per share. (Source: “ExxonMobil Announces 2025 Results,” Exxon Mobile Corporation, January 30, 2026.)
Cash flow from operating activities was $12.7 billion with free cash flow of $5.6 billion.
For 2025, the company generated industry leading earnings of $28.8 billion, or $6.70 per share and cash flow from operations of $52.0 billion.
Exxon’s full-year net production reached its highest level in more than 40 years at 4.7 million oil-equivalent barrels per day. Specifically, production from the Permian and Guyana hit annual records of 1.6 million barrels of oil equivalent per day and 700,000 gross barrels per day respectively.
Commenting on the results, Darren Woods, Chairman and CEO, said, “ExxonMobil is a fundamentally stronger company than it was just a few years ago, and our 2025 results demonstrate that.”
“We’re capturing more value from every barrel and molecule we produce and building growth platforms at scale – creating a long runway of profitable growth through 2030 and beyond.”
Hikes Payout For 43 Consecutive Years
Thanks to Exxon’s strong cash generation and disciplined capital allocation, it is able to provide shareholders with strong dividend growth and share buybacks. From 2021 to 2025 it delivered leading shareholder distributions in excess of $150 billion. That’s more cash than all but five companies in the entire S&P 500 in 2025.
On the dividend front, it has increased its payout for 43 consecutive years. Since 1982, that payout has expanded at a compound annual growth rate (CAGR) of approximately six percent.
That dividend growth is expected to continue. In December 2025 it announced a new 2030 business plan that includes $25 billion in earnings growth and $35 billion in cash flow growth compared with 2024. (Source: “ExxonMobil raises its 2030 Plan – transformation delivering higher earnings, stronger cash flow, and greater returns,” Exxon Mobile Corporation, December 9, 2025.)
Earnings growth is projected to average 13% per year through 2030, with double-digit cash flow growth, and even higher per-share growth. This should help juice is dividend payouts and share buybacks.
In March it paid out a first quarter dividend of $1.03 per share, or $4.12 per share on an annual basis, for a forward dividend yield of 2.56%. While that’s not an ultra high yield dividend, it is more than double the current dividend yield on the S&P 500, which, at 1.24%, is the lowest its been in 50 years.
In the fourth quarter it distributed $9.5 billion to shareholders, including $4.4 billion of dividends and $5.1 billion of share repurchases. For the full-year 2025, the company distributed $17.2 billion of dividends and $20.0 billion of share repurchases.
XOM Shares Hit Record High
Exxon makes up for its lower dividend yield with long term capital gains. Most recently, on March 30 XOM stock hit a record high of $176.41 per share. It continues to trade near that level at, as of this writing, $162.70. That puts it up:
- 8% over the last month
- 38% over the last three months
- 45% over the last six months
- 64% year to date
Of course, the company’s returns are much more significant over the long run, especially if you reinvest dividends. Over the last 10 years, total returns are 204%. Without reinvested dividends, the return slips to 97%. Over the last 25 years, total returns are 736% compared to 300% without reinvested dividends.
If you’re old enough to have held Exxon shares for 50 years, you’re sitting on total returns of 12,579% vs 5,540% had you elected to take the quarterly dividends in cash.
Chart courtesy of StockCharts.com
The Lowdown on Exxon Mobile Corporation
If you’re an energy bull, what’s not to like about ExxonMobil. It’s an industry juggernaut that has a storied history of providing investors with strong share price gains and a reliable, growing dividend.
Many investors may be dubious about oil and gas stock, especially in light of the eventual push to zero emissions, but ExxonMobil has responded to shareholder concerns by reducing spending and announcing emissions reduction targets.
Thanks to new projects (Permian and Guyana) and portfolio mix shift to liquids pricing, cash margins should improve. It also announced its 2030 corporate forecast which should see the company achieve $25 billion in earnings growth and $35 billion increase in cash flow. Both of those figures are up $5 billion from its previous plan.
It expects to buy back $20 billion worth of its shares this year and to maintain the same pace in 2027. This move will help the company achieve Earnings growth of around 13% through 2030.
The annualized dividend per share has also been increased for 43 consecutive years at a CAGR of six percent.