The Pros and Cons of Sub-$50 Oil

XOM Dividend Yield (TTM) Chart

XOM Dividend Yield (TTM) data by YCharts .

That's an incredible opportunity for long-term income investors to buy into the world's largest integrated oil company when it's at its most undervalued in 20 years. In addition, in my opinion, the dividend is extremely safe and likely to continue growing, even if low oil prices persist for some time. That's because Exxon has a spectacular history of growing its dividend through times of industry distress, including the financial crisis, when economic and oil industry conditions were in far worse shape than they are today:

Source: EOG Resources investor presentation.

Looking over the long term, this will make American oil production that much more resilient to commodity price swings. It may cause a lot of pain for investors and workers in the oil patch today, but I get the feeling that a couple of years from now, some of the better companies in the space are going to be thankful that this happened.

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Adam Galas and Jason Hall have no position in any stocks mentioned. John Rosevear owns shares of Ford and General Motors. Matt DiLallo owns shares of ConocoPhillips and Ford, and has the following options: long January 2016 $10 calls on Ford. Tyler Crowe owns shares of ExxonMobil. The Motley Fool owns and recommends Halliburton; owns shares of EOG Resources and ExxonMobil; and recommends Ford, General Motors, and Howard Hughes. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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