Up to date on February twentieth, 2025 by Felix Martinez
Chevron Company (CVX) is among the world’s largest and most well-known power shares. Additionally it is one of many power sector’s most steady dividend progress corporations, having grown its dividend for 38 consecutive years.
Because of this, Chevron is a member of the unique Dividend Aristocrats – a bunch of 69 elite dividend shares with 25+ years of consecutive dividend will increase.
We imagine the Dividend Aristocrats are a few of the highest-quality dividend shares in your complete inventory market. With this in thoughts, we created a full listing of all 69 Dividend Aristocrats, together with necessary monetary metrics similar to dividend yields and P/E ratios.
You’ll be able to obtain a replica of our full Dividend Aristocrats listing by clicking on the hyperlink under:
Disclaimer: Certain Dividend is just not 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 is predicated on Certain Dividend’s personal evaluation, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person traders higher perceive this ETF and the index upon which it’s based mostly. Not one of the data on this article or spreadsheet is official information from S&P World. Seek the advice of S&P World for official data.
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 power trade. This text will analyze Chevron’s intermediate-term funding prospects.
Enterprise Overview
Chevron is certainly one of 6 built-in oil and fuel 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 fuel manufacturing and downstream refining companies. In 2023, Chevron generated 74% of its earnings from its upstream section. Due to this fact, it’s extremely delicate to the underlying commodity worth.
World oil demand has continued to extend within the years because the coronavirus pandemic steadily. Individually, oil and fuel costs have been elevated because of the 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 fuel 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 fuel 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 12 months. 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 improve to $1.71 per share. Full-year earnings totaled $17.7 billion, although decrease refining margins and asset retirement prices impacted money stream.
Development Prospects
Chevron is among the largest publicly traded power firms on the planet and stands to learn tremendously from elevated costs of oil and fuel.
Chevron invested closely in progress tasks for years however didn’t 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 constructive 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. Due to this deal, Chevron will buy the extremely worthwhile Stabroek block in Guyana and Bakken belongings, tremendously enhancing its manufacturing and free money stream.
Nonetheless, given the almost all-time excessive earnings-per-share anticipated this 12 months, we anticipate 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 measurement and monetary power. 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, notably given that it’s the most leveraged oil main to the oil worth. Nonetheless, because of its robust steadiness sheet, the corporate is prone to endure the following downturn, similar to it has accomplished in all of the earlier downturns.
Chevron’s aggressive cost-cutting efforts have helped the corporate grow to be extra environment friendly. Chevron has continued to cut back drilling prices, considerably decreasing its break-even expense.
Chevron stacks up nicely amongst its friends within the power sector. Nonetheless, the corporate is definitely not essentially 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% improve)
2009 adjusted earnings-per-share: $5.24 (-55% decline)
2010 adjusted earnings-per-share: $9.48 (81% improve)
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 a lot of its rivals out of enterprise.
This allowed Chevron to proceed elevating its dividend fee all through the Nice Recession. Chevron’s dividend security is way above the typical firm within the power sector.
Valuation & Anticipated Whole Returns
Chevron’s anticipated whole returns are tougher to evaluate than these of many different corporations. That is primarily because of the firm’s extremely unstable outcomes, which consequence from the dramatic swings in oil and fuel costs.
With a share worth 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 truthful worth estimate of 14 occasions earnings, this might suggest a fractional valuation headwind over the following 5 years.
Furthermore, the inventory gives 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.
General, the inventory might generate a -0.5% common annual return over the following 5 years off its almost all-time excessive present inventory worth.
Remaining Ideas
Chevron is among the uncommon oil and fuel corporations that was in a position to navigate by way of the Nice Recession of 2007-2009, the oil downturn of 2014-2016, and the COVID-19 pandemic with out reducing its dividend.
Chevron’s decrease value 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.
Nonetheless, 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 worth.
Moreover, the next Certain Dividend databases include essentially the most dependable dividend growers in our funding universe:
When you’re on the lookout for shares with distinctive dividend traits, take into account the next Certain Dividend databases:
The main home inventory market indices are one other strong useful resource for locating funding concepts. Certain Dividend compiles the next inventory market databases and updates them month-to-month:
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