Exxon Mobil Corporation

Exxon Mobil is the world's most valuable corporation. With more than $40 billion a year in profits, it is also the most profitable business in history. It would probably surprise most casual observers that Exxon Mobil owes almost all of the attention paid to the company to its tremendous scale. With annual revenues surpassing $400 billion, the company's sub-10% profit margin is hardly awe-inspiring. Even within the context of the global oil business, Exxon Mobil is just a bit player. The company contributes just 3% of the world's oil and 2% of its total energy. Several state petroleum producers are significantly larger than Exxon Mobil. But Exxon Mobil stands alone as the largest American multi-national.

Consequently, Exxon Mobil takes extreme heat in the press for its shady foreign business practices and dodgy human rights record. The Exxon Valdez oil spill still makes headlines years after the US Supreme Court left the company on the hook for $5 billion in punitive damages. Even Exxon Mobil's funding of global warming skeptics needs to be seen in light of the companies American heritage. The state oil monopolies in Saudi Arabia or Venezuela don't need to spend money to alter public opinion, Russia's Gazprom just cuts right through government red tape to open huge new projects. In contrast, Exxon Mobil must fight aggressively just to stay in business.

Yet Exxon Mobil enjoys countervailing advantages that far outweigh these disadvantages. The legal framework in the United States may make doing business difficult, but it also makes it virtually impossible to expropriate profits. For all the concern about a windfall profits tax, Exxon Mobil faces no threat even close to the danger it faces doing business in numerous autocratic nations around the world. Russia and Venezuela simply seize foreign assets at will. At least in the United States, property rights are accorded much more protection.

Exxon Mobil is the world's largest publicly traded oil company. The entire energy sector has been experiencing tremendous growth in recent years and the same regulatory structure that once nearly strangled the industry has now given rise to enormous barriers to increased production. In an ironic twist of fate, current production is now immensely more profitable without any significant increase in the cost of doing business. And regulatory hurdles to new production have made the industry completely impregnable to new competition.

Exxon Mobil is a risky energy play. If any company is going to be held back due to political pressure, that company will surely be Exxon Mobil. Nonetheless, the company stands to profit more than any other company on the planet if current trends continue. Stock symbol XOM is a definite buy. Any investments of fresh capital should be balanced by other investments without significant energy exposure.