Try as we might, the world runs on oil. So you’d think buying stock in a company like ExxonMobil (XOM) would be a millionaire-maker. But would you be right?
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The company certainly has a rich past, getting its start when John D. Rockefeller and partners formed Standard Oil Company in 1870. That company quickly grew so dominant that it was broken up into 33 separate companies by the U.S. Supreme Court in 1911. One of those companies became Exxon in 1972 and in 1999 merged with Mobil Oil to become the behemoth we know today as ExxonMobil.
There are signs that the oil giant is dabbling in new forms of energy, including a recent $100 million investment to extract lithium from water in Arkansas to be used in lithium batteries, which most electric and hybrid vehicles use. But in reality, $100 million is chump change for a company with a market capitalization of over $517 billion, so it’s safe to say ExxonMobil’s fortunes rise and fall with oil.
But would your fortunes rise or fall if you invested in ExxonMobil 10 years ago? You might be surprised to learn that, while they would rise, it might not be the gusher you’d expect. If you had invested $1,000 in ExxonMobil stock in late April 2014, with an April 26, 2024, closing stock price of $117.96 per share, your investment would be worth $1,490.17. That assumes no dividend reinvestment. With dividend reinvestment, your initial $1,000 investment would be worth $1,798.73. That represents an annual return of 6.04% and a total return of 79.87%. That doesn’t even beat the S&P 500 without dividend reinvestment, which would have grown your $1,000 to $2,112.32 with an annualized return of 7.83%.
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Of course, ExxonMobil has some formidable competitors in the oil game. Would your $1,000 bet have been better placed on one of them instead?
|
Company |
April 26, 2014 Price |
April 26, 2024 Price |
Current Investment Worth (Dividends reinvested) |
% Return |
|
ExxonMobil Corporation (XOM) |
$101.17 |
$117.96 |
$1,798.73 |
79.87% |
|
Chevron Corp (CVX) |
$125.73 |
$165.89 |
$2,008.40 |
100.84% |
|
Shell PLC (SHEL) |
$75.80 |
$73.27 |
$1,698.09 |
69.81%* |
*Without dividend reinvestment, stockholder would incur a loss.
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This article originally appeared on GOBankingRates.com: Here’s How Much a $1,000 Investment in ExxonMobil Stock 10 Years Ago Is Worth Now