Dividend Aristocrats In Focus: Chevron Corporation – Sure Dividend

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 vitality shares. Additionally it is one of many vitality sector’s most steady dividend development corporations, having grown its dividend for 38 consecutive years.

Because of this, 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 a number 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 vital monetary metrics reminiscent of 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: Positive Dividend shouldn’t be affiliated with S&P World in any means. S&P World owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet is predicated on Positive 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 primarily based. Not one of the data on this article or spreadsheet is official knowledge from S&P World. Seek the advice of S&P World for official data.

Because of the business’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 business. 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 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 battle in Ukraine and ensuing sanctions on Russia. Earlier than the sanctions, Russia was producing about 10% of world 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 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 report $27 billion to shareholders, together with $15.2 billion in buybacks and $11.8 billion in dividends. The board permitted 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 move.

Manufacturing hit report ranges, with world output up 7% and U.S. manufacturing rising 19%, pushed by development within the Permian Basin and PDC Power integration. Key initiatives included the Anchor deepwater improvement within the Gulf of Mexico and the Future Progress Challenge 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 value 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 development.

Progress Prospects

Chevron is without doubt one of the largest publicly traded vitality firms on the earth and stands to learn tremendously from elevated costs of oil and gasoline.

Chevron invested closely in development initiatives for years however didn’t develop its output for a complete decade, as oil initiatives take a number of years to start out bearing fruit. Nonetheless, Chevron is now within the optimistic part 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 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. Because of this deal, Chevron will buy the extremely worthwhile Stabroek block in Guyana and Bakken property, tremendously enhancing its manufacturing and free money move.

However, 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 vitality 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 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, identical to it has carried out in all of the earlier downturns.

Chevron’s aggressive cost-cutting efforts have helped the corporate develop into extra environment friendly. Chevron has continued to cut back drilling prices, considerably lowering its break-even expense.

Chevron stacks up nicely 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% 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 cost all through the Nice Recession. Chevron’s dividend security is much above the typical firm within the vitality sector.

Valuation & Anticipated Complete Returns

Chevron’s anticipated whole returns are harder to evaluate than these of many different corporations. That is primarily as a result of firm’s extremely unstable outcomes, which outcome 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 instances primarily based on 2025 anticipated earnings of $10.70 per share.

If the inventory reverted to our truthful worth estimate of 14 instances earnings, this is able to indicate 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 may generate a -0.5% common annual return over the following 5 years off its almost all-time excessive present inventory worth.

Ultimate 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 worth. 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 business’s cycle, which is notorious for its dramatic swings, Chevron ought to in all probability be prevented round its present inventory worth.

Moreover, the next Positive Dividend databases comprise probably the most dependable dividend growers in our funding universe:

If you happen to’re searching for shares with distinctive dividend traits, think about the next Positive Dividend databases:

The most important home inventory market indices are one other stable useful resource for locating funding concepts. Positive Dividend compiles the next inventory market databases and updates them month-to-month: