Up to date on February twentieth, 2025 by Felix Martinez
Chevron Company (CVX) is among the world’s largest and most well-known vitality shares. It’s also one of many vitality sector’s most secure dividend progress corporations, having grown its dividend for 38 consecutive years.
In consequence, 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 imagine the Dividend Aristocrats are among the highest-quality dividend shares in the complete inventory market. With this in thoughts, we created a full listing of all 69 Dividend Aristocrats, together with vital monetary metrics similar to dividend yields and P/E ratios.
You possibly can obtain a replica of our full Dividend Aristocrats listing by clicking on the hyperlink under:
Disclaimer: Positive Dividend will not be affiliated with S&P World in any method. S&P World owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet relies on Positive Dividend’s personal evaluate, 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 primarily based. Not one of the info on this article or spreadsheet is official knowledge from S&P World. Seek the advice of S&P World for official info.
Because of the trade’s reliance on excessive commodity costs for profitability, solely two oil shares are on the listing of Dividend Aristocrats: Chevron and Exxon Mobil (XOM).
Chevron’s dividend consistency and stability assist it stand out within the in any other case unstable vitality trade. This text will analyze Chevron’s intermediate-term funding prospects.
Enterprise Overview
Chevron is one in all 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 worth.
World 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 warfare 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 circumstances was evident in Chevron’s efficiency in 2022, though circumstances softened in 2023 and 2024 as oil and gasoline costs moderated off their peaks.
Nonetheless, Chevron is posting sturdy 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 accredited 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 circulate.
Manufacturing hit document ranges, with international output up 7% and U.S. manufacturing rising 19%, pushed by progress within the Permian Basin and PDC Power integration. Key tasks included the Anchor deepwater improvement within the Gulf of Mexico and the Future Progress Venture in Kazakhstan. Chevron additionally divested property in Canada, Alaska, and the Republic of Congo whereas advancing its $53 billion acquisition of Hess. The corporate goals for $2–3 billion in price financial savings by 2026.
Chevron expanded low-carbon initiatives, slicing emissions by 700,000 metric tons and rising carbon storage efforts. It upgraded refining capabilities in Pasadena, Texas, and secured new exploration acreage worldwide. The corporate additionally launched a $500 million Future Power Fund III to put money into clear vitality applied sciences whereas sustaining its deal with capital self-discipline and long-term progress.
Progress Prospects
Chevron is among the largest publicly traded vitality companies on the planet and stands to profit tremendously from elevated costs of oil and gasoline.
Chevron invested closely in progress tasks for years however did not develop its output for a complete decade, as oil tasks take a number of years to start out bearing fruit. Nonetheless, 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 worth of $40.
One other long-term progress 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. Because of this deal, Chevron will buy the extremely worthwhile Stabroek block in Guyana and Bakken property, drastically enhancing its manufacturing and free money circulate.
However, given the practically all-time excessive earnings-per-share anticipated this yr, we anticipate an -5 % common annual lower over the following 5 years.
Aggressive Benefits & Recession Efficiency
Chevron’s aggressive benefit within the extremely cyclical vitality sector comes primarily from its measurement and monetary energy. The corporate’s operational experience allowed it to navigate the 2020 coronavirus pandemic efficiently.
As a commodity producer, Chevron is susceptible to any oil worth downturn, significantly given that it’s the most leveraged oil main to the oil worth. Nonetheless, because of its sturdy steadiness sheet, the corporate is prone to endure the following downturn, identical to it has finished 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 decreasing its break-even expense.
Chevron stacks up effectively amongst its friends within the vitality sector. Nonetheless, the corporate is definitely not probably the most recession-resistant Dividend Aristocrat, as evidenced by its efficiency in the course of 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% in the course of the 2007-2009 monetary disaster, however the firm managed to stay worthwhile throughout a bear market that drove lots of its rivals out of enterprise.
This allowed Chevron to proceed elevating its dividend cost all through the Nice Recession. Chevron’s dividend security is way above the typical firm within the vitality sector.
Valuation & Anticipated Whole Returns
Chevron’s anticipated complete returns are tougher to evaluate than these of many different corporations. That is primarily as a result of firm’s extremely unstable outcomes, which consequence from the dramatic swings in oil and gasoline costs.
With a share worth close to $158, the price-to-earnings ratio presently sits 14.8 occasions primarily based on 2025 anticipated earnings of $10.70 per share.
If the inventory reverted to our honest worth estimate of 14 occasions earnings, this is able to suggest a fractional valuation headwind over the following 5 years.
Furthermore, the inventory affords a 4.4% dividend yield. Nonetheless, the valuation tailwind and the dividend are prone to be offset by the anticipated 5% common annual decline in earnings per share.
Total, the inventory might generate a -0.5% common annual return over the following 5 years off its practically all-time excessive present inventory worth.
Remaining Ideas
Chevron is among the uncommon oil and gasoline corporations that was in a position to 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 price construction permits it to deal with a a lot decrease common oil worth. Moreover, new tasks 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 most likely be prevented round its present inventory worth.
Moreover, the next Positive Dividend databases comprise probably the most dependable dividend growers in our funding universe:
When you’re searching for shares with distinctive dividend traits, contemplate the next Positive Dividend databases:
The foremost home inventory market indices are one other strong useful resource for locating funding concepts. Positive Dividend compiles the next inventory market databases and updates them month-to-month:
Thanks for studying this text. Please ship any suggestions, corrections, or inquiries to assist@suredividend.com.
