Madison Dividend Income Fund is Bullish on ExxonMobil Holdings Corporation (XOM)

Madison Dividend Income Fund is Bullish on ExxonMobil Holdings Corporation (XOM) Soumya Eswaran Wed, July 22, 2026 at 3:38 PM GMT+2 4 min read XOM ^GSPC Madison Dividend Income Fund, managed by Madison Funds, released its Q2 2026 investor letter. A copy of the letter can be downloaded here . The Fund aims to generate income and capital appreciation from a high-quality, high-dividend portfolio.

The Fund (class I) returned +1. 8% in the second quarter, which compared to the S&P 500 Index, Russell 1000 Value Index, and Lipper Equity Income peer group returns of +15. 2%, +13.

9%, and +9. 7%, respectively. YTD, the Fund returned +7.

7%, compared with +10. 2%, +16. 3%, and +9.

9% for the indexes, respectively. The Technology sector performed strongly, while Energy lagged. The firm sees the Energy sector's decline as an opportunity to buy undervalued energy stocks with good dividends.

With S&P 500 valuations at all-time highs, risks include market correction and multiple contraction. The Fund aims to mitigate these risks by maintaining a diversified mix of high-quality, high-yield stocks in undervalued sectors. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its Q2 2026 investor letter, Madison Dividend Income Fund highlighted ExxonMobil Holdings Corporation (NYSE: XOM ). ExxonMobil Holdings Corporation (NYSE:XOM) is a leading energy company that engages in the exploration and production of crude oil and natural gas. On July 21, 2026, ExxonMobil Holdings Corporation (NYSE:XOM) closed at $151.

71 per share, reflecting a market capitalization of $628. 83 billion. ExxonMobil Holdings Corporation (NYSE:XOM) posted a one-month return of 10.

82%, while its shares gained 38. 01% over the past 52 weeks. Madison Dividend Income Fund stated the following regarding ExxonMobil Holdings Corporation (NYSE:XOM) in its Q2 2026 investor update: "One of the fund's top holdings is ExxonMobil Holdings Corporation (NYSE:XOM).

XOM is the world's premier integrated oil and gas company. It has attractive upstream exploration and production assets in the low-cost Permian Basin and a unique, ultra-low-cost growth opportunity in Guyana, along with developing liquid natural gas (LNG) assets for data centers. The company has a downstream Product Solutions segment that refines energy, chemical and specialty products.

Its low-cost position, diversified asset base, scale, integrated assets and strong balance sheet provide a sustainable competitive advantage, in our view. XOM's five-year "Plan to 2030" provides a framework for higher growth and substantial capital returns. It targets 65% of upstream production from its "advantaged" assets by 2030, up from 59% today, which will drive a favorable mix shift and expand margins.

The company thinks it can add $25 billion in earnings and $35 billion in cash flow while keeping capital expenditures flat in the $22-27 billion range. Another reason we like XOM is because it has a strong balance sheet and is a dividend compounder. The company has an AA- rated balance sheet by S&P with strong cash flow generation and track record of 43 consecutive years of dividend increases.

XOM paid $150 billion in dividends from 2021-2025, which is more distributed cash than all but five other S&P 500 stocks. At quarter end, XOM had an absolute dividend yield of 3% and a relative dividend yield versus the S&P 500 of 2. 2x.

" Story Continues ExxonMobil (XOM): Strong Cash Flow and Strategic Investments Drive Dividend Confidence ExxonMobil Holdings Corporation (NYSE:XOM) is not on our list of  40 Most Popular Stocks Among Hedge Funds Heading Into 2026 . According to our database, 94 hedge fund portfolios held ExxonMobil Holdings Corporation (NYSE:XOM) at the end of the first quarter, compared to 98 in the previous quarter. While we acknowledge the potential of ExxonMobil Holdings Corporation (NYSE:XOM) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk.

If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock . In  another article , we covered ExxonMobil Holdings Corporation (NYSE:XOM) and shared the list of best major stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q2 2026  page for more investor letters from hedge funds and other leading investors.

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