With Gas at $4.48 a Gallon, Here's How Much ExxonMobil Stock You Need to Buy to Fill Up Your Tank
Key Points
Fuel prices are on the rise.
Energy investors can hedge their exposure with oil stocks.
According to AAA data, the national average for unleaded gas is around $4.48 per gallon. This time last year, the national average price was closer to $3.16 per gallon.
Diesel prices have risen even faster. On Sept. 22, AAA recorded its highest national average for diesel fuel -- $6.53 per gallon -- since it began tracking prices.
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Want to help offset your exposure to rising fuel prices? ExxonMobil (NYSE: XOM) dividends are a worthwhile solution.
Here's how XOM stock can pay for your gas
ExxonMobil currently pays a 2.54% dividend. The average fuel tank in the U.S. is around 14 gallons. At $4.48 per gallon, it costs more than $60 for the average American to fill their tank. To pay for a single tank with dividends, investors would need to own about $2,400 worth of ExxonMobil stock.
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Paying for your gas regularly with ExxonMobil dividends, therefore, requires a lot of capital. But there's another way to view an investment in an oil stock such as ExxonMobil. You can use potential capital appreciation as a hedge.
Over the past five years, ExxonMobil stock has risen 181% in value without factoring in dividends. Crude oil prices, meanwhile, have risen by just 26% over the same time frame.
While this capital appreciation doesn't directly provide you with usable cash like dividends would, investors could gradually sell off some stock to free up capital for fuel purchases. So while paying for gas with dividends alone can be difficult, using oil stocks as a hedge against rising fuel prices could be even more effective.
Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.