I intend for this to be a multipart series talking about the "big oil" companies that are out there today. Topics to cover will be who they are, where they came from, various competitive advantages if any, and what you're getting for each dollar you invest. I think that there are opportunities in the oil industry, and I want to help track them down and take advantage of them. Not in any particular order, but Exxon Mobil (XOM) is first on my list. Today's Exxon Mobil corporation is built from many little pieces of what used to be the Standard Oil Company. The Rockefellers created that company and grew it into a huge monopoly of a business via expansion as a trust from 1870 until the government forced it's separation in 1911. Pretty much all of the big oil corporations that exist today came from pieces of that operation. When John D. Rockefeller died in 1937, he was worth an inflation adjusted $337 billion. I'm going to do an initial quick breakdown of some important metrics here, and will use these as a basis of comparison with other big oil in future entries. Market Cap: $309.47 billion Earnings per share (ttm) $4.73Price/Earnings Ratio: 15.71 Dividend amount annual $2.92Dividend Yield: 3.80% 5 year dividends per share growth rate: 10.69% 5 year earnings per share growth rate: 11.70% At the close of market today, XOM sold for $74.34 per share. I want to introduce you to a new way of measuring growth potential, this is something that I do personally in my analysis and I find it very convenient. I measure these same metrics on a per dollar basis so that I can easily compare potential against peers, and then look at where I'd be after 5 years invested. It works like this: 4.73 (Earnings per share) / 74.34 (Dollars per share cost) = 0.06362, or 6.36 cents earned per dollar invested in the company. 2.92 (Dividends per share) / 74.34 = 0.3927, or 3.93 cents in dividends per dollar invested,. 6.36 * 1.117 compounded 5 times = 11.06. 3.93 * 1.1069 compounded 5 times = 6.53 So what an investor might expect to earn for each dollar invested after 5 years is: 11 cents per dollar in earnings, and 6.5 cents in dividends. 72% compounded increase in earnings, and 65% increase in dividends. Take the sum of those two, divide it by half and you can expect a mean growth of 68.5%. I call that number "Economic earnings". Your 5 year estimated growth in this investment, all else equal and consistent, should be to $125.26 per share. That number is your total compounded result of economic earning, and the market tends to price stocks with these factors in mind. Allowing for fluctuation in share price, in a bear market at 10x EE you might get $79 per share, and in an extremely bullish market at 25x EE you get $199.33. The longer you hold your shares, the more likely you are to get closer to the higher number, but these inputs should be examined from time to time. These numbers are, of course, completely able to change. But you can improve your margin of safety. If you believe that oil is in a long term state of decline that will never recover, knock 1/5th of the compounded amounts off each year. It could happen, but it won't happen immediately. There are still a lot of oil burning machines out there. You can certainly let your estimates get more complicated than this by throwing in other ratios, but they don't tend to affect the outcomes very much. Companies that have been operating a certain way for a long time tend to keep doing those things. That's why these numbers should be trusted. I would actually recommend printing out the above data on some card stock, and keep an index of them in this way. The more of these comparisons that you are familiar with in your mind, the faster you will know which stocks are the best deals. More will be coming soon. Follow me for updates.