When you DRIP invest, you have to be particularly sure about the long-term health of the business because the purpose is to gradually accumulate shares over time, as opposed to the Benjamin Graham approach to investing that deals with the deliberate purchase of undervalued securities with the intention of selling them at fair value.

With DRIP investing, you regularly accumulate shares of a company and attempt to share in its growth story over time.

There are certain qualities that Exxon Mobil NYSE: XOM possesses which make it a somewhat ideal DRIP holding for investors:. The stock price does not usually get excessively overvalued. It is a component of just about every index fund, trust fund, and pension plan you can imagine. It is widely covered by dozens of analysts, and owned by plenty of retail investors with good reason.

The dividend has a high likelihood of growing every year, and Exxon may be in the early stages of increasing its dividend growth rate.

The company has been raising its dividend for 31 years, and if you trace Exxon's history back to its Standard Oil days, you will see that the predecessor company combined with the "new Exxon" has paid an uninterrupted dividend since More interestingly, we are seeing signs that not only is Exxon's dividend reliable, but its dividend growth rate is starting to pick up.

CVX and ConocoPhillips NYSE: COP , Exxon seems to be showing signs of increasing its payout ratio and granting shareholders a more impressive growth rate in the dividend. The company holds up well in "worst case scenarios. With Exxon's size, it demonstrates a remarkable resiliency especially for a cyclical company to hold up well in worst case scenarios.

When we look at Exxon's history, it is fair to estimate that represented the worst year in a generation for Exxon operationally. Earnings took a substantial hit as oil prices declined sharply.

ExxonMobil (XOM) DRIP - Dividend Reinvestment Plan Advice

In a terrible operating environment that only shows up a couple of times in an investing lifetime, Exxon still managed to generate billions of dollars in profit, grow the dividend, and buyback shares simultaneously.

The company always has an eye on the future. When you enter the world of DRIP Investing, the long-term stability of your shares is probably a top priority. You do not want to spend a decade of your life putting a couple of hundred dollars into a company only to see it disappear ask anyone who dripped into Wachovia stock what that is like.

With Exxon, you do not have that worry.

These are the kinds of unparalleled investments for the long-term future that Exxon is able to make that is rarely seen among large-cap companies.

Exxon's annual net profits would make it about the 87th largest country in the world, if you compare Exxon's net profits to GDP. It is doing the kinds of things that make it an ideal DRIP investment. It usually does not get terribly overvalued. The company buys back about 1.

The dividend has been paid without interruption since the 19th century, and the dividend growth rate has been increasing. This confluence of factors make Exxon Mobil an ideal DRIP investment. To begin the DRIP process with Exxon, you can click here.

I am long COP , XOM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article. REITs Dividend Ideas Dividend Strategy Dividend News Dividend Quick Picks Editor's Picks. My Ten Largest Investments. XOM possesses which make it a somewhat ideal DRIP holding for investors: Want to share your opinion on this article?

Stockholder Services — bozunoteyuta.web.fc2.com

Disagree with this article? To report a factual error in this article, click here. Follow Tim McAleenan Jr.