When you think about investing in big oil companies, ExxonMobil almost always comes to mind. It is one of the largest energy companies in the world and has been around for over a century. But if you had taken $1,000 of your hard-earned money and invested it in Exxon 10 years ago, how much would you really have today? The answer may surprise you.
How much would a $1,000 investment in Exxon be worth today?
If you bought ExxonMobil (XOM) stock in April 2014, you would have paid about $101.17 per share. Fast forward to April 2024, and the stock closed at $117.96 per share.
- Without dividends reinvested, your $1,000 would now be worth $1,490.17.
- With dividends reinvested, that same $1,000 would have grown to about $1,798.73.
That works out to a total return of nearly 80% over the decade, or about 6% per year on average.
Recommended:
Are luxury watches really a smart investment?
Did Exxon beat the S&P 500?
Here’s where things get interesting. If you had invested that same $1,000 in an S&P 500 index fund instead of Exxon, you would actually be ahead.
- The S&P 500 would have turned $1,000 into $2,112.32 in the same 10-year period.
- That is an annualized return of about 7.8%, which is higher than Exxon’s 6%.
So, while Exxon made money for its investors, it did not quite keep up with the broader market.
How does Exxon compare to other oil giants?
You might be wondering if Exxon did better or worse than its competitors. Let us look at two of its biggest rivals:
- Chevron (CVX): A $1,000 investment 10 years ago would now be about $2,008.40 with dividends reinvested. That is a 100.8% return, beating Exxon.
- Shell (SHEL): The same $1,000 would be about $1,698.09, or a 69.8% return. That puts Shell below Exxon but above inflation.
So, if you had picked Chevron instead of Exxon, you would have been better off.
Recommended:
If you invested $1,000 in Intel 10 years ago, here’s how much you would have today
Why did Exxon’s stock grow slower?
ExxonMobil’s performance is tied closely to the price of oil. Over the past decade, oil prices have gone through big ups and downs, from the oil crash in 2014–2016 to record highs in 2022.
At the same time, the push toward renewable energy and electric vehicles has created uncertainty for oil companies. While Exxon is starting to explore new areas like lithium production for batteries, most of its money still depends on traditional oil and gas.
Is Exxon still a good investment today?
That greatly depends on what you wish to accomplish. If you are searching for:
- Steady dividend income: Exxon has acquired a reputation for lending trustworthy dividends for ages, sometimes raising them in the process.
- Long-term stability: As one of the major players in the energy business, Exxon will not cease to exist anytime soon.
- Growth: It might not beat the S&P 500 but the returns it offers to investors looking for income are appreciable.
However, if your number one objective is to make a killing through investment returns, then, based on history, it might be best to look at a broader index fund or one of its rivals like Chevron.
Recommended:
Inflation up in August: what that means for interest rates
Bad news for ATM users: fees hit record breaking levels
This new tax bill promises savings of up to $5,374 — is your state included?
