Friday, September 26, 2014

Chevron (CVX) Dividend Stock Analysis 2014

Chevron Corporation (CVX), through its subsidiaries, is engaged in petroleum, chemicals, mining, power generation, and energy operations worldwide. The company operates in two segments, Upstream and Downstream. This dividend champion has paid a dividend since 1912 and increased it for 27 years in a row.

In April 2014, the Board of Directors approved a 7% increase in the quarterly dividend to $1.07/share. Chevron’s peers include Exxon Mobil (XOM), ConocoPhillips (COP) and British Petroleum (BP).

The company has managed to deliver a 12% average increase in annual EPS over the past decade. Chevron is expected to earn $10.81 per share in 2014 and $11.37 per share in 2015. In comparison, the company earned $11.09/share in 2013.

The annual dividend payment has increased by 10.50% per year over the past decade, which is lower than the growth in EPS. Future growth in dividends will likely match rate of increase in earnings per share.

Currently, Chevron is attractively valued at 11.80 times forward earnings, and has a dividend yield of 3.30%. Overall, I believe that oil companies like Chevron have the quality of assets that generate strong cash flows, and quality of a management team, coupled with a dedication to sharing the wealth with shareholders through a commitment to dividend growth and share buybacks. While dividend growth rates might fluctuate from year to year, I am firmly believing that the investor with a 20 year horizon, who patiently accumulates and reinvests dividends, will reap the rewards in the future.

Read the full article on Seeking Alpha

Full Disclosure: Long CVX, XOM and BP

Relevant Articles:

Why Warren Buffett purchased Exxon Mobil stock?
Occidental Petroleum (OXY) Dividend Stock Analysis
Selling Puts: Pros and Cons for Dividend Investors
ConocoPhillips (COP) Dividend Stock Analysis 2014
How to Generate Energy Dividends Despite the Peak Oil Non Sense

8 comments:

  1. Chevron is on my short list. Do you have an entry point spelled out or are you good with entering at the current price point.

    Keep cranking,

    Robert the DividendDreamer

    ReplyDelete
  2. Long XOM, CVX, and BP.

    DGI, where are the normal graphs? I miss them...
    Thanks,
    KeithX

    ReplyDelete
  3. Agree, looks pretty good now, especially with recent pressure on energy. I do believe there are better choices out there now, however (BBL, AOS, and IBM for reference).

    ReplyDelete
  4. Chevron's tempting, but since I already own XOM and COP, along with a handful of other oil-n-gas companies, I'm worried about loading up too much in one industry.

    But Chevron is still tempting.

    ReplyDelete
  5. I own too many oils also - CVX, COP, RDS/B, XOM.. Energy might in for some pressure near term, but for those with a 20 year timeframe it might not matter.

    I updated to link to the complete analysis on Seeking Alpha. For the next few weeks, all the analysis here will refer to the complete analyses on Seeking Alpha. After that I will evaluate whether this was a dumb move on my behalf or not.

    ReplyDelete
  6. CVX is very attractive right now....I am tempted to buy more at these levels.

    R2R

    ReplyDelete
  7. Thanks for sharing...we've added this analysis to our collection of dividend stock analyses. :) AFFJ

    ReplyDelete

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