There are many terms used to describe energy stocks these days -- "stable" definitely isn't one of them. Even the higher-quality companies in the industry, the integrated majors, have suffered as the drop in oil and gas prices has tempered expectations and caused an unbridled amount of uncertainty in the sector. Because the integrated model has exposure to the entire oil and gas value chain, though, many of these integrated majors have been able to navigate the energy downturn better than others.

Lucrative returns from integrated oil and gas companies have been well known over the years. Integrated energy companies, such as ExxonMobil (XOM 0.38%), can weather the cyclical forces of the commodities market and still pay handsome dividends. The stability and income features make them a great place to invest over the long term.

Of course, as Fools, we want to buy these companies during weakness in commodity cycles -- which is exactly what we have today. So let's take a hard look at one of the biggest names in the industry to see if an opportunity exists for us Fools.

Global leader in oil and gas E&P
As of year-end 2014, ExxonMobil has a reserve life of 17-plus years. With a reserve base of 92 BOEB, the company has positioned itself for the long term. It continues to exceed reserve replacement of 100%, meaning the company has been able to add to its reserve base. The company has exceeded 100% for 21 straight years, with the current reserve replacement standing at 104%.

Source: ExxonMobil company presentation.

Being a low-cost producer in a commodity business is essential to long-term success. Over the years, ExxonMobil has proved it can operate at a high level as a low-cost producer and still generate excess free cash flow. ExxonMobil's cost per barrel from 2009 to 2013 of $22 is one of the lowest in the industry. Also, ExxonMobil E&D costs are less than $10 BOEB, making the company one of the lowest in the industry.

Source: ExxonMobil company presentation.

Vertical integration provides stability and durable moat
In addition to ExxonMobil's prowess in the E&P space, the company has a refining capacity of 6.3 million barrels per day. This capacity makes it the largest refiner in the world and allows it to integrate with the lubricant and chemical business. The businesses in the chemical segment of the company, normally less cyclical than E&P segments, are No. 1 or No. 2 in the industry.

Source: ExxonMobil company presentation.

Its vertical integration across the entire supply chain offers customers incredible value. The ability to leverage strategic partnerships with vertical integration and supply chain expertise gives it substantial scale advantages over its competitors. ExxonMobil's return on average capital employed has trounced peers since 2010.

Proven shareholder-friendly and competent management team
Management has been extremely shareholder-friendly, having returned $15.1 billion to shareholders in the form of dividends and share repurchases in the past year alone. Overall, management has repurchased 14% of the shares outstanding since 2010. Don't' expect this to continue, however, as ExxonMobil is tapering buybacks at the moment to buffer liquidity in this low commodity environment. Additionally, management has been able to generate returns on invested capital of over 17% the past five years, proving its ability to allocate capital effectively.

Source: ExxonMobil company presentation.

Management has increased the dividend from $1.74 to $2.88 per share since 2010 and issued dividends to investors for 33 straight years. I expect management to continue to be shareholder-friendly regarding dividends. It's also staying focused in the current depressed environment, reducing capex in 2016 by 25%.

Bottom line
Historically, investors have flocked to integrated energy companies because they're stable dividend payers. Recent share price volatility has certainly rattled many investors in these names. But I still think that the investment thesis for integrated oil and gas companies holds true. Even with the advent of alternative energy sources, global growth in emerging countries will continue to drive oil and gas demand for years to come.

As one of the most iconic and profitable companies in the world, ExxonMobil has positioned itself to last the test of time (or as long as the world needs fossil fuels). The company benefits tremendously from the vertical integration model and has one of the largest O&G reserve bases in the world. In addition, ExxonMobil's scale of operations allows it to operate as one of the lowest-cost producers in the industry.

Despite the risks in the highly cyclical O&G industry, the market seems to be aware of its relative strength. Case in point: XOM's valuation doesn't look especially appealing in this high-quality business, as it trades at an FCF yield of 4.36% (using a three-year average of FCF, which comes to approximately $15 billion). 

All in all, because of the company's size and valuation, shares are unlikely to make you rich at current levels. However, its integrated business model provides stability and a dividend yield of 3.56%. Fossil fuel dependence is unlikely to dissipate overnight, so as long as the company continues to generate excess free cash flow to cover a hearty dividend payout, then ExxonMobil is a buy-and-hold company. My preference, however, is to wait for an even larger margin of safety.