Exxon is ‘really well-positioned’ to withstand inflation

  • May 25, 2022

Exxon Mobil Corporation (NYSE: XOM) has already seen a close to 50% increase in its stock price this year, but the Independent Advisor Alliance CIO says it continues to be worth owning in the current macro environment.

The bull case for Exxon stock

According to Chris Zaccarelli, the U.S. oil giant is well-positioned to navigate the inflationary pressures that has the benchmark S&P index down 20% for the year. On CNBC’s “Power Lunch”, he said:

We are in an inflationary environment. There’s a war going on in Ukraine that’s making things only worse. But Exxon Mobil is really well-positioned both to grow its dividend and grow its earnings.

The American multinational will remain a beneficiary as the world continues to avoid Russian energy in response to Putin’s war crimes in Kyiv. The conflict is keeping oil prices well above $100 a barrel this year.

Exxon is a hedge against inflation

Zaccarelli is convinced the stock is not out of juice yet and dubs Exxon Mobil, which has a dividend yield of 3.73%, a good hedge against inflation. Speaking with CNBC’s Kelly Evans, he noted:

You can add Exxon Mobil to your portfolio for some inflation protection over the next couple of years as the U.S. Federal Reserve tries to fight inflation and it’ll take some time for them to bring things back down.

The U.S. CPI came down slightly but still stood at a near forty-year high of 8.30% in April. Invezz’ Motiur Rahman also sees Exxon stock a better buy than rival Chevron Corp.

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