Exxonmobil Has Raised Its Dividend 43 Years In A Row. But…

An Exxon sign outside of a gas station.

Image source: Getty Images.

Four raises, 17% total

ExxonMobil lifted its quarterly dividend from $0.88 to $0.91 in October 2022, a 3.4% increase. Then came $0.95 in 2023, $0.99 in 2024, and $1.03 last October — raises of 4.4%, 4.2%, and 4%, respectively.

Add up all four raises, and the payout has grown about 17% in total.

For contrast, in 2012 the company raised its dividend 21% in a single announcement, taking the quarterly payout from $0.47 to $0.57. One raise back then moved the payout by a bigger percentage than the last four combined have.

The leanest stretch sits between those eras. ExxonMobil held its quarterly payout at $0.87 for 10 straight quarters, from mid-2019 until late 2021, as the pandemic crushed oil prices. The calendar-year total still inched higher anyway, because the last raise before the freeze took effect partway through 2019. That timing technicality kept the streak alive — but just barely.

Why so small?

The small raises are not about affordability. The company could afford much bigger ones.

ExxonMobil’s second-quarter net income came to $14.5 billion, or $3.48 per , about double the $7.1 billion it earned in the year-ago quarter.

Cash flow from operations was $23.6 billion, and free cash flow was $17.2 billion.

The quarter’s dividend cost about $4.3 billion, part of $9.4 billion in total holder distributions. In other words, free cash flow covered the payout about four times over. That is coverage most dividend payers can only envy.

The money the dividend doesn’t take is going somewhere else. ExxonMobil spent $5.1 billion on repurchases in the second quarter, consistent with a buyback program running at a $20 billion annual pace — more than the roughly $17 billion a year the dividend costs. And the company keeps investing heavily in growth, putting $13 billion of cash capital expenditures to work in this year’s first half alone, with record Permian Basin production and a fifth production vessel now in Guyana.

That mix is a choice, and the frozen-payout stretch explains it. Oil’s 2020 collapse turned the dividend into a strain, and the quarterly rate went nowhere for two and a half years while management protected it. The lesson stuck.

Capital returns were rebuilt around a dividend sized to survive any oil price, with buybacks absorbing the boom-time cash instead. After all, buybacks can be dialed back in a bad year without breaking anything. A dividend raise is a commitment that never expires.

ExxonMobil Stock Quote

NYSE: XOM

ExxonMobil

Today’s Change

(-2.08%) $-3.41

Current Price

$160.64

Key Data Points

Market Cap

$675BMarket cap calculated using publicly traded s outstanding only. Does not include unlisted, private, or dual-class non-traded s. Implied market cap may vary.

Day’s Range

$160.46 – $162.81

52wk Range

$108.35 – $176.41

Volume

17.5M

Avg Vol

15.8M

Gross Margin

20.88%

Dividend Yield

2.51%

What the streak buys now

There’s a defensible logic to all of it, and the payout is arguably safer today than it has been in decades. Coverage is thick, the balance sheet carries little net debt for a company this size, and the raise pace no longer depends on oil prices cooperating.

But investors buying the stock for the streak should see it for what it now is. The 43 years describe durability, not growth. At about 2.5%, the yield is ordinary, and at about 4% per year, the raises roughly track inflation rather than outrunning it. A holder’s income check grows — slowly.

Could October bring an upside surprise? The cash is certainly there, and this year’s earnings environment has been strong. But four straight years of about 4% raises look less a constraint and more a policy, and policies at companies this size don’t change casually.

Ultimately, ExxonMobil’s dividend record is intact and well-funded. It is also growing more slowly than it once did. Sure, I think the streak deserves its reputation. The size of the raises is another matter.