Report on Exxon Payout Strategy

Exxon Mobil Corporation is an American multinational oil and gas corporation and doing the business in the US by the name of ExxonMobil. Company’s headquarters are in Irving, Texas which is the state of the US. The company was established on the date of 30^th November 1999 by the partnership of two companies in which Exxon the Standard Oil Company of New Jersey and Mobil the Standard Oil Company of New York are included. ExxonMobil has different brands like Exxon, Esso, Mobil, and ExxonMobil Chemical.

Currently, Petroleum industry has come to maturity due to high competition and few new customers or markets, and existing companies have to cut the other company’s market share to survive. To retain market share in the oil and gas industry, ExxonMobil will be able to increase their revenue streams by depending on more equity. The ExxonMobil dividend payout strategy is reasonable towards shareholders. The company equity is increasing by which company paying more to their shareholders. ExxonMobil company earnings to the average share of equity are 11.1 in 2017 as high from 2016 and 2015. But from a few past years as 2014 and 2013 shows company earnings is 18.7 and 19.2 respectively which is ever high in their history. It means the payout ratio is decreased. In 2017 the ratio again increased due to acquiring more equity. 

The frequency of dividend payments is increasing year by year due to high profits. Yes, the company dividend payout strategy makes sense as it is linked with the profits of the company as a trend has shown. Management of the Exxon is giving a positive message to shareholders as the company earns more, they give more. Yes, I agree with the payout strategy of ExxonMobil. The shareholders of the company are also considered to be pleased with the dividend payment structure because the company is paying an annual dividend with a significant increase in every year as compared to competitors.