Hahaha.
Exxonmobil management suspended that when they devalued the company 60% over the last 4 years. Invest $1.00 and get $0.85 back WITH the 7% matching!
I was viewing that stock match as amends they were making for driving our investment down.
Without that match, I wouldn’t gamble a cent on XOM.
Looks like no one else is either.
$95.12 July 2016
$39.33 August 2020
All of my other investments are up between 20-50% except XOM.
Dividends are only one part of total return (what really matters). Just look at the opportunity cost of being all-in on the stable XOM dividend vs a diversified fund for the last 10 years. If my only option is to get free or deeply discounted XOM shares that's one thing, but if I have other options on where to put my money I wouldn't even consider Exxon stock especially with the risk to my family's cash flow I already have with Exxon by working there.
Because many people mistakenly think of dividends as a bond-like contractual obligation from a company. Not to get into the weeds, but it could be an indicator of the "quality" or "value" factor, but a dividend is only one aspect to judge a company on. In the simplest terms the dividend is just an OPTIONAL payment to shareholders of excess profit that the company can find no better use for. If for an extended period of time the dividend payout remains the same, or increases, while the company continues to have no profits in the first place it is generally going to be viewed by investors as a sign of inept capital allocation by management. In short people overvalue dividends because of a lack of investor education... the same way they do a stock split! lol
Because the dividends are based on when the stock was high and they refuse to lower it to be line with actual value... executives get stock options and that is how they make their big money... they don’t want a pay cut... let’s just how many employees we can get rid off and stoop keep our pay whole
Why does everyone talk about how great the dividends are then?
It’s just common sense to not invest in your company’s stock, you already have massive exposure to company performance (job security, etc), always de-risk and diversify. People that owned XOM stock are facing double consequences of PiP and capital loss.
I never had, and never would, invest in individual XOM stock. However, the other funds in our 401K are great and losing a 7% contribution to them hurts for sure!