ExxonMobil Corporation's (NYSE:XOM) yield is currently around 4%, the highest it's been since the 1990s. The integrated energy giant's price to tangible book value, meanwhile, is the lowest it has been since the 1980s. If you're looking for a good value in the oil and gas sector, Exxon should be on your wish list. Only, there's a reason it's so cheap today: The company is lagging peers on key industry metrics. But despite a few negatives, ExxonMobil Corporation is still a buy for long-term income investors. Here's why.

1. Production in reverse

One of the key ways for an oil and natural gas driller to grow is by expanding production over time. When production falls, the business is, effectively, shrinking. That's been a key sore spot for Exxon lately, with production declining in 2016 and 2017. Although the 2.7% drop over those two years may not seem like a huge deal at first, the production declines have continued into 2018. Exxon's oil and gas business is simply going in the wrong direction and it has investors worried.   

A man with a notebook standing in front of an oil well

Image source: Getty Images.

To make matters worse, there's nothing in the near term to suggest Exxon is going to shift back into growth mode. In fact, during the second-quarter conference call, management noted that it was focusing on the most profitable production options it has, not on the most expedient. Put another way, the company is focusing on long-term profitability, rather than appeasing short-term investors and their desire to see higher production.

That said, Exxon has a plan. With big investments in onshore U.S. oil and gas, offshore oil in Brazil, and natural gas in Mozambique, among others, Exxon is confident that it can reverse the current downward trend. It will take some time for these multiyear projects to be completed. However, the company expects them to make up 50% of its upstream earnings by 2025. With long-term debt at roughly 10% of its capital structure, the company has the financial leeway to get there even if oil prices head south in the interim.    

2. Falling in with the pack

Exxon has another big headache today: Its return on invested capital, a measure of how well management puts its shareholders' money to work, has fallen into the middle of its peer group. Large-scale investments that haven't worked out as planned were a big part of this, including paying a premium for U.S. onshore natural gas company XTO Energy just before gas prices began to soften and a more recent foray with Russia's Rosneft that was effectively killed by U.S. sanctions on the country. That's a change from the past when Exxon was routinely at the head of the pack. This was one of the key reasons that Exxon stock had historically been awarded a premium price relative to peers.

XOM Return on Capital Employed (TTM) Chart

Return on Capital Employed (TTM) data by YCharts.

Once again, Exxon has a plan. But, as with production, it's going to take time for that plan to play out. The reason: These two issues are tightly related. Exxon's goal is to get its return-on-capital employed number up from the current 7% or so into the mid-teens. It hopes to get there by focusing on its highest-value projects, including the ones noted above. Part of the process involves Exxon taking more control of its biggest projects, which would allow it to increasingly benefit from its expertise in bringing giant energy investments to fruition. And history suggests that, given enough time, this strategy will lead to improving performance.   

3. The rest of the business

While oil and natural gas are huge at Exxon, there's more to the company's business. Notably, its chemicals and refining operations, segments that help balance out the company's revenue and earnings over time, are also key growth areas for the company today.

Exxon is expecting to double earnings in both segments by 2025. Getting there will include expanding its refining business in the U.S. market to take advantage of its onshore production in the country. That should help maximize profitability and, along with a shift toward premium products (such as lubricants), allow Exxon to increase profit margins by 20% by 2025. On the chemicals side, the energy giant is looking to expand capacity by 40% by 2025, with 13 new chemical plants scheduled to be built. Exxon is looking to benefit from location as well with new investments close to advantaged energy sources (U.S. onshore) and near key end markets (Asia). Return on capital employed in these two businesses is already well above the company's average, with continued strength the expectation. Unfortunately, Exxon's growth plans in chemicals and refining are still long-term in nature, with the 2025 goals more than six years away.     

If you don't mind waiting

Is ExxonMobil a buy? There are really two answers to the question. If you are a short-term investor who wants quick results, then the answer is no. Exxon is looking to the long term today and is going to use the same conservative, slow-moving approach it has always taken. If you are a long-term income investor, however, collecting the stock's 4% yield while you wait for Exxon to execute on its growth plans sounds like a pretty good deal. And, assuming things work out as management hopes, investors will likely reward the shares with a premium again in the not-too-distant future as Exxon regains its leadership role in the energy industry. This is why Exxon is in my portfolio today.