Chevron Corporation (NYSE:CVX) has pleased shareholders over the past 10 years, paying out an average dividend of 4.00% annually. The stock currently pays out a dividend yield of 3.96%, and has a market cap of US$216.15B. Should it have a place in your portfolio? Let’s take a look at Chevron in more detail. View our latest analysis for Chevron
Here’s how I find good dividend stocks
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Does it pay an annual yield higher than 75% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share risen in the past couple of years?
Can it afford to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
How well does Chevron fit our criteria?
Chevron has a trailing twelve-month payout ratio of 88.47%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 68.38%, leading to a dividend yield of 4.07%. However, EPS should increase to $6.03, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of CVX it has increased its DPS from $2.32 to $4.48 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes CVX a true dividend rockstar. Compared to its peers, Chevron generates a yield of 3.96%, which is on the low-side for Oil and Gas stocks.
With these dividend metrics in mind, I definitely rank Chevron as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three fundamental factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for CVX’s future growth? Take a look at our free research report of analyst consensus for CVX’s outlook.
Valuation: What is CVX worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CVX is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.