Exxon Mobil Price to Book Value: Exxon Mobil Price to Book Value Chart For advanced charting, view our full-featured Exxon Mobil Historical Price to Book Value Data View and export this data going back to 1972. Start your Free Trial Data for this Date Range There is no data for the selected date range.Please try again by refreshing your browser or contact us with details of your problem. About Price to Book Ratio Price to book value is a financial ratio used to compare a company's book value to its current market price. Book value is an accounting term denoting the portion of the company held by the shareholders at accounting value (not market value). In other words, book value is the company's total tangible assets less its total liabilities. The ratio has two calculation methods. In the first way, the company's market capitalization is divided by the company's total book value from its balance sheet. The second way, using per-share values, is to divide the company's current share price by the book value per share.
In general, a low price to book value indicates that a stock is undervalued and thus more desirable. In theory, if you purchased stock with a price to book value less than 1 and the company immediately went bankrupt, you would gain money on your investment. In reality, this may not be true since there are times when liquidation value, or the price at which a company's assets can be sold, is less than the book value of those assets.For more information on evaluating valuation multiples similar to this, please see our original white paper research : Making Sense Of Valuation Multiples. XOM Price to Book Value Benchmarks XOM Price to Book Value Range, Past 5 Years XOM Price to Book Value Excel Add-In Codes Latest data point: =YCP("XOM", "price_to_book_value") Last 5 data points: =YCS("XOM", "price_to_book_value", -4) To find the codes for any of our financial metrics, see our Complete Reference of Metric Codes. Access our powerful Excel Add-in with a YCharts Professional Membership.
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SummaryExxon Mobil has a great culture of prioritizing shareholder returns.It's a perennial favorite with oil & gas investors, and deservedly so.We should still remain critical and open minded about future returns.Will Exxon Mobil continue to trounce competitors, and more importantly, will its stock outperform? I'd say the necessary condition for the existence of bargains is that perception has to be considerably worse than reality. That means the best opportunities are usually found among the things most others won't do. After all, if everyone feels good about something and is glad to join in, it won't be bargain-priced. - Howard Marks There is no arguing Exxon Mobil (NYSE:XOM) is a terrific company with a great culture and run by some of the smartest, most shareholder-friendly management teams in the industry. Recently, Royal Dutch (NYSE:RDS.B) CEO Ben van Beurden announced his main goal is to surpass Exxon. I'm quite skeptical of Ben van Beurden's chances even though I haven't been as positive about Shell's strategic choices in many years.
My skepticism is purely a product of Exxon's dominance in big oil. It's a powerhouse consistently delivering the highest returns on invested capital among its peer group. XOM Return on Invested Capital (TTM) data by YCharts Management did a remarkable job growing tangible book value per share while sustaining this high level of returns. This could very well be the result of a conscious choice, and we'll see how it plays out. Will Exxon be forced to replenish reserves at high prices or will it be able to pick off assets out of the carcasses of its failed competitors? Still, only one competitor, Chevron (NYSE:CVX), clearly made better progress on tangible book value per share. XOM Tangible Book Value (Per Share) data by YCharts When we review the peer group on free cash flow per share, Chevron's win looks more like a Cadmean victory, and Exxon once again comes out on top. XOM Free Cash Flow Per Share (TTM) data by YCharts Exxon isn't just a powerhouse compared to its peer group of majors, but it also benefits from the tremendous economies of scale that are hard to match by midsized peers.
Exxon invests less per barrel of production compared to almost any group and that's what drives the great returns. Although the immediate outlook for oil & gas isn't all that exciting, it stands to reason Exxon's position as a low-cost producer will last for quite a while. The company secured a number of unique production assets, and as long as these last, it will enjoy quite an advantage. Why you shouldn't buy Exxon Maybe it's too obvious Exxon is a great company? Perhaps investors bid it up too far because of its many admirable qualities? Let me take you back a little bit almost two years ago; oil prices exceeded $100 per barrel. WTI Crude Oil Spot Price data by YCharts Exxon was pretty much the same dominant company, but obviously making a lot more money per share as we have also observed in the cash flow per share graph. XOM Normalized Diluted EPS (TTM) data by YCharts EPS decreased by no less than 60% over those two years. Obviously, prospects have soured considerably since that day with energy specialists like Shawn Driscoll expecting a prolonged energy bear market.
Obviously, Exxon's share price also decreased to adjust to this new reality. XOM Total Return Price data by YCharts The graph shows total return; the share price actually did decline somewhat in excess of 10%, but that's nothing compared to the decrease in the price of oil. That's weird because this is a business with tremendous operating leverage. Operators face a host of fixed costs from investments, salaries and royalties to government levies that are fixed (it's one of the models). When oil prices go through the roof, it's a terrific business, but in a prolonged dry spell of exceptionally low prices you get killed. Oil prices declined by 60% over this period, and Exxon hardly budged. It now trades at a significant premium to tangible book. XOM Price to Tangible Book Value data by YCharts A premium is well deserved, but I fear this is excessive. Is Exxon really that much better than its peers Chevron or Royal Dutch? They both pump up the same stuff, and Royal Dutch's new strategy is to imitate Exxon.