Exxon Mobil is close to be back in the top 10 of S&P 500
Exxon Mobil, the biggest oil and gas company in the US, is up 71% this year taking the market value to $440bn as of yesterday’s close. This brings the stock to the 11th place in S&P 500 on market capitalization regaining some of the lost terrain for energy stocks in the S&P 500. Despite the recent rally Exxon Mobil is valued at 12-month free cash flow yield of 9% compared to around 6% for the MSCI World Index.
As we recently wrote in a note, energy stocks are the cheapest in 27 years, and they have rallied from just 2.4% of the total market value in the S&P 500 to 5.2% as of May with the long-term average at 7.5%. Under the assumption of an ongoing energy crisis and hangover from low investments over the previous 8 years, energy prices will continue to remain high and deliver high return on invested capital for energy companies. We remain structurally positive on oil and gas stocks.