Exxon is giving you 25% return on investment?
How are yoiu doing that with a 2-3% dividend yield?
Exxon is an excellent stock, don't get me wrong. But where the fuck does 25% come from?
Copied from Exxon's Annual Report page 6
Strong safety and operations performance supported by effective risk management
Earnings of $45 billion and an industry-leading return on average capital employed of 25 percent
Total shareholder distributions of $30 billion
(1)
Dividends per share increased 21 percent in the second quarter of 2012, the 30th consecutive year
of dividend per share increases
If you own a thousand shares of Exxon your annual earnings are $7,940. All of this money is yours! However, your divided checks for the year are only $2,520.
Another $2800 is returned to you in the form of share buybacks which is as real as a cash divided with the added benefit of your not having to be taxed on it. Your remaining $2620 is retained by the company and receives a return on capital of 25%. As stated in there annual report page six.
And that is why Exxon has the highest market caps of any American company and a AAA credit rating.