Up to date on February twentieth, 2025 by Felix Martinez
Chevron Company (CVX) is without doubt one of the world’s largest and most well-known power shares. Additionally it is one of many power sector’s most steady dividend development corporations, having grown its dividend for 38 consecutive years.
Consequently, Chevron is a member of the unique Dividend Aristocrats – a gaggle of 69 elite dividend shares with 25+ years of consecutive dividend will increase.
We consider the Dividend Aristocrats are a number of the highest-quality dividend shares in the complete inventory market. With this in thoughts, we created a full checklist of all 69 Dividend Aristocrats, together with necessary monetary metrics corresponding to dividend yields and P/E ratios.
You possibly can obtain a replica of our full Dividend Aristocrats checklist by clicking on the hyperlink under:
Disclaimer: Certain Dividend is just not affiliated with S&P International in any manner. S&P International owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet relies on Certain Dividend’s personal overview, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person buyers higher perceive this ETF and the index upon which it’s based mostly. Not one of the info on this article or spreadsheet is official knowledge from S&P International. Seek the advice of S&P International for official info.
Because of the trade’s reliance on excessive commodity costs for profitability, solely two oil shares are on the checklist of Dividend Aristocrats: Chevron and Exxon Mobil (XOM).
Chevron’s dividend consistency and stability assist it stand out within the in any other case risky power trade. This text will analyze Chevron’s intermediate-term funding prospects.
Enterprise Overview
Chevron is one among 6 built-in oil and gasoline super-majors, together with:
BP (BP)
Eni SpA (E)
TotalEnergies (TTE)
Exxon Mobil (XOM)
Shell (SHEL)
Like the opposite built-in supermajors, Chevron engages in upstream oil and gasoline manufacturing and downstream refining companies. In 2023, Chevron generated 74% of its earnings from its upstream section. Subsequently, it’s extremely delicate to the underlying commodity value.
International oil demand has continued to extend within the years for the reason that coronavirus pandemic steadily. Individually, oil and gasoline costs have been elevated as a result of struggle in Ukraine and ensuing sanctions on Russia. Earlier than the sanctions, Russia was producing about 10% of worldwide oil output and one-third of pure gasoline consumed in Europe.
The profit from these exceptionally favorable situations was evident in Chevron’s efficiency in 2022, though situations softened in 2023 and 2024 as oil and gasoline costs moderated off their peaks.
Nonetheless, Chevron is posting robust monetary outcomes. On the finish of January, Chevron reported (1/31/25) earnings for the fourth quarter and full yr. The corporate fourth-quarter 2024 earnings of $3.2 billion ($1.84 per share), up from $2.3 billion in 2023, with adjusted earnings at $3.6 billion. The corporate returned a document $27 billion to shareholders, together with $15.2 billion in buybacks and $11.8 billion in dividends. The board authorised a 5% dividend enhance to $1.71 per share. Full-year earnings totaled $17.7 billion, although decrease refining margins and asset retirement prices impacted money movement.
Progress Prospects
Chevron is without doubt one of the largest publicly traded power firms on this planet and stands to profit tremendously from elevated costs of oil and gasoline.
Chevron invested closely in development initiatives for years however did not develop its output for a whole decade, as oil initiatives take a number of years to begin bearing fruit. Nevertheless, Chevron is now within the optimistic section of its investing cycle.
Supply: Investor Presentation
As well as, because of the high-grading of its asset portfolio, Chevron can fund its dividend even at an oil value of $40.
One other long-term development catalyst is Chevron’s main acquisition. On October twenty third, 2023, Chevron agreed to Purchase Hess (HES) for $53 billion in an all-stock deal. Due to this deal, Chevron will buy the extremely worthwhile Stabroek block in Guyana and Bakken belongings, vastly enhancing its manufacturing and free money movement.
However, given the almost all-time excessive earnings-per-share anticipated this yr, we count on an -5 % common annual lower over the following 5 years.
Aggressive Benefits & Recession Efficiency
Chevron’s aggressive benefit within the extremely cyclical power sector comes primarily from its dimension and monetary power. The corporate’s operational experience allowed it to navigate the 2020 coronavirus pandemic efficiently.
As a commodity producer, Chevron is weak to any oil value downturn, notably given that it’s the most leveraged oil main to the oil value. Nevertheless, because of its robust steadiness sheet, the corporate is prone to endure the following downturn, identical to it has executed in all of the earlier downturns.
Chevron’s aggressive cost-cutting efforts have helped the corporate turn out to be extra environment friendly. Chevron has continued to cut back drilling prices, considerably lowering its break-even expense.
Chevron stacks up effectively amongst its friends within the power sector. Nevertheless, the corporate is actually not essentially the most recession-resistant Dividend Aristocrat, as evidenced by its efficiency through the 2007-2009 monetary disaster:
2007 adjusted earnings-per-share: $8.77
2008 adjusted earnings-per-share: $11.67 (33% enhance)
2009 adjusted earnings-per-share: $5.24 (-55% decline)
2010 adjusted earnings-per-share: $9.48 (81% enhance)
Chevron’s adjusted earnings per share declined by greater than 50% through the 2007-2009 monetary disaster, however the firm managed to stay worthwhile throughout a bear market that drove lots of its opponents out of enterprise.
This allowed Chevron to proceed elevating its dividend cost all through the Nice Recession. Chevron’s dividend security is much above the typical firm within the power sector.
Valuation & Anticipated Whole Returns
Chevron’s anticipated complete returns are harder to evaluate than these of many different corporations. That is primarily as a result of firm’s extremely risky outcomes, which end result from the dramatic swings in oil and gasoline costs.
With a share value close to $158, the price-to-earnings ratio presently sits 14.8 occasions based mostly on 2025 anticipated earnings of $10.70 per share.
If the inventory reverted to our honest worth estimate of 14 occasions earnings, this could suggest a fractional valuation headwind over the following 5 years.
Furthermore, the inventory gives a 4.4% dividend yield. Nevertheless, the valuation tailwind and the dividend are prone to be offset by the anticipated 5% common annual decline in earnings per share.
General, the inventory might generate a -0.5% common annual return over the following 5 years off its almost all-time excessive present inventory value.
Remaining Ideas
Chevron is without doubt one of the uncommon oil and gasoline corporations that was capable of navigate via the Nice Recession of 2007-2009, the oil downturn of 2014-2016, and the COVID-19 pandemic with out slicing its dividend.
Chevron’s decrease value construction permits it to deal with a a lot decrease common oil value. Moreover, new initiatives within the U.S. and worldwide markets will assist the corporate proceed to develop.
However, as we’re nearing the height of the oil trade’s cycle, which is notorious for its dramatic swings, Chevron ought to in all probability be averted round its present inventory value.
Moreover, the next Certain Dividend databases comprise essentially the most dependable dividend growers in our funding universe:
Should you’re on the lookout for shares with distinctive dividend traits, think about the next Certain Dividend databases:
The foremost home inventory market indices are one other stable useful resource for locating funding concepts. Certain Dividend compiles the next inventory market databases and updates them month-to-month:
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