ExxonMobil

Methodology

ExxonMobil's fair value calculation is highly sensitive to commodity price cycles, producing inflated values during oil price peaks and depressed values during troughs that don't reflect normalized earning power. Investors should normalize earnings using mid-cycle oil prices rather than current spot prices to generate more reliable baseline estimates. The integrated oil major's significant earnings leverage to crude prices makes timing this valuation method crucial, as peak-cycle valuations can be misleading indicators.

Methodology

ExxonMobil's PEG ratio swings dramatically with energy cycles, often appearing undervalued at cycle bottoms and overvalued at peaks when extrapolating recent growth rates. The integrated structure provides more stability than pure exploration companies, but sustained high growth is rare in mature oil and gas given capital intensity and commodity price volatility. Elevated PEG ratios during strong oil markets typically signal expensive valuations relative to the sector's long-term growth constraints and cyclical nature.

Methodology

ExxonMobil's meaningful dividend yield significantly improves the PEGY ratio, reflecting management's commitment to shareholder returns even during industry downturns and oil price weakness. The company's dividend resilience through multiple oil price crashes and disciplined capital allocation make total return metrics more relevant than growth alone for integrated energy majors. PEGY better captures the investment case for ExxonMobil, where income stability matters as much as price appreciation given the cyclical nature of energy earnings.