Big Oil is back and that is evident in the rising price of industry leader Exxon Mobil, which hit a new 52-week high Wednesday and topped $400 billion in market valuation
Exxon Mobil (Ticker XOM) is close to cracking the top 10 in the S&P 500—it ranked 12th as of Tuesday night—after its 58% gain this year. The shares were up 2% at $96.30 Wednesday. Exxon was 26th in the S&P 500 coming into 2022.
It's worth recalling that in October 2020, Exxon stock traded at a third its current price and was valued at less than Zoom Video Communications (ZM).
The situation has since flipped. Zoom Video is down over 80% from its October 2020 high of $572 and now trades at around $100, valuing the videoconferencing company at $30 billion, or less than a tenth of Exxon Mobil's current market value.
It was a different in October 2020 before Pfizer's news of favorable results from its Covid vaccine clinical trial signaled a reopening of the American economy. Stay-at-home stocks were market darlings and Zoom Video was one of the biggest favorites.
Its stock had run up fivefold since the start of the pandemic in March 2020 and was valued at $162 billion at its peak in October 2020, against $139 billion for Exxon Mobil.
At that time, oil prices were $40 a barrel (against $112 now) and natural gas was $2.50 per thousand cubic feet (versus nearly $9 now). Exxon Mobil was operating in the red and Wall Street was concerned it would have to cut its dividend.
Exxon stock then traded below its book value and had shareholder equity of $184 billion against just $1.5 billion for Zoom, which then fetched almost 300 times earnings. But Exxon maintained its dividend payout, and it now comfortably covers the dividend from earnings.
All this shows that the economy and markets can change a lot in less than two years.
Exxon still has a long way to go before it can regain its No. 1 stock position in the index which held at the end of 2011. Market-cap leader Apple is valued at $2.3 trillion, almost six times that of Exxon.