No matter how hard we try, the world runs on oil, so you’d think buying stock in a company like Exxon Mobil (XOM) would make you a millionaire. But is that true?
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The company certainly has a rich history, beginning with John D. Rockefeller and partners founding the Standard Oil Company in 1870. The company quickly became dominant and was broken up into 33 separate companies by the U.S. Supreme Court in 1911. One of those companies became Exxon in 1972, which merged with Mobil Oil in 1999 to become the giant corporation known today as ExxonMobil.
There are some signs the oil giant is dabbling in new forms of energy, such as a recent $100 million investment to extract lithium from Arkansas water for use in the lithium batteries used in most electric and hybrid cars.But in reality, $100 million is a tiny amount of money for a company with a market capitalization of more than $517 billion, and it’s no exaggeration to say that ExxonMobil’s fortunes will rise and fall with oil.
But would your fortune have grown or fallen if you had invested in ExxonMobil 10 years ago? You might be surprised to learn that even if it did grow, it might not have soared as much as you expected. If you invested $1,000 in ExxonMobil stock in late April 2014, your investment would have grown to $1,490.17 if the closing price on April 26, 2024 was $117.96 per share. This assumes no dividend reinvestment. With dividend reinvestment, your original $1,000 investment would have grown to $1,798.73. This equates to a 6.04% annual return and a 79.87% total return, which doesn’t even come close to the S&P 500 without dividend reinvestment. Without dividend reinvestment, your $1,000 would have grown to $2,112.32, a 7.83% annual return.
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Of course, ExxonMobil has strong competitors in the oil industry, and you might be better off betting your $1,000 on one of them.
|
company |
April 26, 2014 Price |
April 26, 2024 Price |
Current investment value (dividends reinvested) |
% return |
|
Exxon Mobil Corporation (XOM) |
$101.17 |
$117.96 |
$1,798.73 |
79.87% |
|
Chevron Corporation (CVX) |
$125.73 |
$165.89 |
$2,008.40 |
100.84% |
|
Shell PLC (SHEL) |
$75.80 |
$73.27 |
$1,698.09 |
69.81%* |
*If dividends are not reinvested, shareholders will suffer a loss.
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This article originally appeared on GOBankingRates.com: If You Invested $1,000 in ExxonMobil Stock 10 Years Ago, How Much Would You Have Now?
