How to Evaluate Exxon Stock Volatility


Purchasing Exxon stock is a wise investment if you are looking for a safe way to invest your money. The corporation is headquartered in Irving, Texas, and is one of the giant oil and gas corporations in the United States. The company has three primary business segments – Upstream, Downstream, and Chemicals.

Price levels

Despite being the world’s largest oil and gas company, Exxon Mobil stocks have not been rising as fast as they should. Historically, the company has provided industry-leading returns. But now, several factors are affecting Exxon’s value.

President Joe Biden has threatened a windfall tax on major oil companies. Meanwhile, Chevron announced that it plans to cut emissions from its upstream operations to net zero by 2050. In response, some climate-change activists called Exxon to make the same pledge.

ExxonMobil also has a good track record of executing capital expenditures across commodity price cycles. For example, its refining division has avoided overspending during the oil price collapse of the past few years. Similarly, the company’s refinery expansion plan is set to be a significant driver of profitability.

Free cash flow

Among the oil supermajors, Exxon has been the best at generating cash flow. Last year, it generated more free cash flow than it spent on capital expenditures. The company also had the second-best dividend history.

One of the things ExxonMobil has been doing is the right way: maximizing free cash flow and using it to fund growth initiatives. It has done this by allocating a big chunk of its budget to crucial oil and gas projects. In addition, Exxon has streamlined its organizational structure. This will help it capitalize on low-cost-of-supply opportunities in its downstream and chemicals businesses.

Free cash flow is calculated by subtracting capital expenditures from cash flow from operations. It isn’t an exact science because it depends on a discount rate. It is also not a direct measure of how much debt a company will pay in the future.

Financial leverage

Using leverage is a common strategy in the business world. It allows companies to use extra capital for their operations, thereby increasing the potential return on investment. However, high financial leverage can also be a risk to stockholders. This is because high leverage comes with high-interest expenses.

The financial leverage of Exxon stock is a measure of how much debt the company has compared to its equity. This ratio allows investors to see how the company’s debt affects its profitability.

The level of financial leverage is one of the main factors used to evaluate a company’s performance. The higher the ratio, the higher the risk to shareholders. When a company has high leverage, it has a higher cost of production. Generally, investors consider lower financial leverage to be a good sign.

Market volatility

Using Exxon stock volatility to evaluate a stock can help you identify the best investment strategy for your portfolio. The best way to do this is to understand the fundamentals behind the metric. This can be done by understanding the stock’s beta and standard deviation.

The standard deviation measures the random fluctuations of a particular equity’s price. The higher the variance, the more price variations there will be. The standard deviation can be positive or negative, depending on the direction of the volatility.

The beta is a metric that compares the risk associated with holding a particular stock versus the market. A stock with a beta of one is expected to increase more than the market in an upcall and decline less in a down market.

Upstream, Downstream, and Chemical segments

Exxon is a fully integrated fuels and chemicals company among the world’s largest publicly-held companies. Its products and services range from exploration and production of crude oil, natural gas, and liquefied natural gas to manufacturing, marketing, and distribution of petroleum and petrochemicals. In addition to its traditional business, Exxon also provides products and services that address climate change issues.

Exxon’s primary business is the exploration, development, and production of crude oil and natural gas. It also engages in the manufacture of petrochemicals, specialty product lines, and olefins. It also has a pipeline company that transports crude oil and refined products across the globe. The company also has projects in the United States, Africa, and Europe.

Exxon has invested heavily in low-emission energy, including carbon capture and biofuels. As a result, it intends to achieve net-zero Scope 2 emissions by 2050.