Also, keep in mind that a good chunk of that cash flow was with oil prices north of $50 per barrel in 2015. Even though the company is able to offset some weakness from production with chemical and refining gains, chances are it won't be able to fully cover that low of a price.
While this is something worth keeping track of, it's hard to see this completely wiping out a chance at a dividend raise. ExxonMobil still maintains its AAA credit rating and a debt-to-capital ratio of 13.7%. As much as it may be painful to say after watching so many companies flounder with debt problems, ExxonMobil does have the financial strength to lean on the debt market a little to cover any short-term cash needs in 2016.
If this market weakness were to continue into 2017, though, then having to tap the debt market to fund capital budgets and dividends will not look good.
What a Fool believes
As safe as ExxonMobil's dividend may seem, no investor should assume that it is a guarantee in a market where oil prices are now close to 70% off their highs in mid-2014. Based on the company's relative strength in the industry, a steadier stream of cash from its vertically integrated business model, and some wiggle room in its budget and shareholder repurchase program, it appears that investors can sleep well knowing that another dividend increase is likely to happen in 2016.
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The article Will ExxonMobil Corporation Raise Its Dividend in 2016? originally appeared on Fool.com.
Tyler Crowe owns shares of ExxonMobil. You can follow him at Fool.com or on Twitter @TylerCroweFool .The Motley Fool owns shares of ExxonMobil. 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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