Sideways oil prices may limit its ability to gain in the near term. But if you’re thinking of buying Exxon Mobil (NYSE:XOM) stock for its high yield, there’s little reason to worry.

With 2020’s troubles behind it, the integrated oil and gas giant is no longer at risk of cutting its dividend. Expected earnings for this year ($4.28 per share) will more than cover its payout.

Sure, investors still have reasons to price in a risk premium. This can be seen in its forward yield of 6.3%, which is above its average dividend yield of around 5.6% over the past four years.

First, there’s the uncertainty over whether oil prices will remain high. Lower oil prices could renew fears of a dividend cut. Second, there are issues related to a socially-conscious activist who recently won several seats on Exxon’s board. Yet, looking at the details, both these concerns appear overblown.

Its rate of payout is safe, and XOM stock is again a great dividend play.

It may take another rally in energy prices to send the stock soaring again. However, if you’re more interested in yield than in potential gains, you may want to snap it up at today’s prices (around $55 per share).

XOM Stock and Its Now-Secure Dividend

Its latest quarterly earnings release on July 30 may have failed to reverse the stock’s recent slide. But taking a look at these results, and there’s plenty to be happy about. By beating on both revenue and earnings, the company appears set to generate more than enough cash flow to both maintain its dividend, as well as make necessary capital expenditures.

Also, as one Seeking Alpha commentator discussed in mid-August, Exxon also is using its cash flow to pay down debt. This may come at the cost of stock buybacks. Yet de-levering its balance sheet bodes well for dividend security. Granted, said security going forward may hinge on where oil prices are heading next.

Risks like the outbreak of Covid-19’s Delta variant worsening could put pressure on energy prices. So far, this factor has had an impact on the price of Brent and WTI crude oil. It also resulted in XOM stock giving up some of its 2021 gains, although it’s still up 34% year-to-date.

That being said, factors like so-called transitory inflation could help soften the blow, or even keep crude prices steady. Again, sideways oil prices will make it tough for shares to move higher in the near term. But if you’re focused on income rather than gains from your portfolio, don’t let concerns about oil prices keep you from buying it.

Recent ESG Activism

Climate activist hedge fund Engine No. 1 won three seats on the company’s board in a recent proxy fight. The rise of ESG (environmental, social, and governance) could put additional pressure on XOM stock.

So far though, as MarketWatch put it on Aug. 16, Engine No.1 has been all talk, no strategy. Institutional investors backed it in the proxy fight so they could signal to millennial-aged investors they are “fighting the good fight” against climate change.

Sure, Engine No. 1 could apply more pressure on Exxon to make changes. But I think it’ll play out similarly to what’s going on with Altria Group (NYSE:MO), parent company of tobacco giant Philip Morris USA. As you may know, Altria’s looking to alternatives to its controversial product (cigarettes), investing heavily in non-combustible nicotine products. Yet for the time being, cigarettes remain its cash cow.

The same thing could play out for Exxon. The oil giant could in the future invest more into alternative energy, yet still continue to produce high cash flow from its legacy fossil fuel business. The takeaway? Both stocks may sport high yields, due to uncertainty over their long-term ability to maintain their respective payouts. But despite society-wide pressure to change their ways, it’ll likely remain business-as-usual for years to come.

Putting it simply, Engine No.1’s victory may have made for great headlines. But I wouldn’t count on this factor having any material impact on XOM stock or its dividend any time soon.

The Bottom Line

With oil prices back to normal, and Exxon again generating sufficient levels of cash flow, its current rate of dividend payout is safe for now. Oil prices may not be at risk of falling again, despite some Delta-related worries. Concerns about its ESG activist seem overblown as well.

It may take time for XOM stock to get back to pre-Covid prices of around $70 per share. But if you’re on the hunt for yield, consider this a solid dividend play.

On the date of publication, Thomas Niel held a long position in MO stock. He did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, a contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.