Financial Research Report
Dr. Glenn Stephens
Financial Management – FIN 534
March 4, 2014
Imagine that you are a financial manager researching investments for your client that aligns with its investment goals. Use the Internet or the Strayer Library to research any U.S. publicly traded company that you may consider as an investment opportunity for your client. The assignment will cover the following topics:
Rationale for choosing the company for which to invest
Stock price analysis
In this paper, provide a rationale for the U.S. publicly traded company that has been selected, indicating the significant factors driving your decision as a financial manager. Determine the profile of the investor for which this company may be a fit, relative to that potential investor’s investment strategy. Select any five (5) financial ratios that I have learned about in the text. Analyze the past three (3) years of the company’s financial data, which I may obtain from the company’s financial statements. Determine the company’s financial health. Based on my financial review, determine the risk level of the company from your investor’s point of view. Indicate key strategies that may be used in order to minimize these perceived risks. Provide recommendations of this stock as an investment opportunity.
Provide a rationale for the U.S. publicly traded company that you selected, indicating the significant factors driving your decision as a financial manager:
Exxon Mobil Corporation (Exxon Mobil) is a manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a range of specialty products. It also has interests in electric power generation facilities. The company has a numerous divisions and affiliates that include Exxon Mobil, Exxon, Esso or Mobil. Divisions and affiliated companies of Exxon Mobil not only operate but also market products in the United States and other countries of the world. Their principle business strategy is energy, involving exploration for, and production of, crude oil and natural gas, manufacturer of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. In October 2011, Cosan SA Industria e Comercio bought the distribution assets of Exxon Mobil in Bolivia, Paraguay and Uruguay. In January 2012, Apache Corporation acquired Exxon Mobil’s Mobil North Sea Limited assets including the Beryl field and related properties (Forbes 2014).
Exxon Mobil was founded in 1859 in the United States. The current CEO for the company is Rex Tillerson. The company employees 76,900 people and is headquartered in Irving, Texas. The company’s annual sales total $420.71B. On the Forbes list, Exxon is #82 on the World’s Most Global Brands, #5 Global 2000 which lists the company as #3 in sales, #1 in profits, #91 in Assets, and #2 in Market Value. The company’s market cap was $400.42 B as of May 2013 (Forbes 2014).
In 2013, the energy giant shares hit an all-time high of $98.88 and were up 50% since the 2009 bottom, for a 69% total return. Compare that return to the Dow’s 143% gain and S&P 500’s 164% rise. The unenthusiastic rate of global growth has kept a lid on gasoline prices, crimping Exxon’s refining margins. The prospects for faster growth may be uninspiring, but with Exxon returning billions in capital every quarter via dividends and buybacks there are plenty of shareholders willing to wait things out. While Exxon has lagged since the broader market’s bottom, the company’s performance in 2013 has not been quite as bad as some of its fellow market heavyweights. In fact, Exxon’s stock has done well enough to keep it out of the Dogs of the Dow at the moment. The Dogs are the 10 highest-yielding stocks in the 30-member index, which have historically outperformed in the following year. Exxon’s 2.6% dividend yield is squarely middle of the pack, compared...
References: Brigham, Eugene F. & Ehrhardt, Michael C. (2014). Financial Management: Theory
And Practice 14th Edition
ExxonMobil. (2014). Managing Climate Change Risks. Retrieved from
Forbes.com. (2013). Exxon Mobil. Retrieved from
Google Finance. (2014). Appendix A of Exxon Mobil Balance Sheet. Google: US
Moskowitz, Dan. (2013). Is Exxon Mobil a Good Investment In Any Environment?
Stock Analysis on Net. (2014). Appendix C of Exxon Mobil Ratio Analysis. Warsaw, Poland
Stock Analysis on Net
Zacks Equity Research. (2014). Zacks Investment Ideas Feature Highlights: ExxonMobil,
Eni, Gran Tierra Energy, EOG Resources and Anadarko Petroleum.
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