Yahoo Finance Chevron Corp's Dividend Analysis
Understanding the Sustainability and Prospects of Chevron Corp's Dividends
Chevron Corp (NYSE:CVX) recently announced a dividend of $1.63 per share, payable on June 10, 2024, with the ex-dividend date set for May 16, 2024. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Chevron Corp's dividend performance and assess its sustainability.
What Does Chevron Corp Do?
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Chevron is an integrated energy company with exploration, production, and refining operations worldwide. It is the second-largest oil company in the United States with production of 3.1 million barrels of oil equivalent a day, including 7.7 million cubic feet a day of natural gas and 1.8 million barrels of liquids a day. Production activities take place in North America, South America, Europe, Africa, Asia, and Australia. Its refineries are in the US and Asia for total refining capacity of 1.8 million barrels of oil a day. Proven reserves at year-end 2023 stood at 11.1 billion barrels of oil equivalent, including 6.0 billion barrels of liquids and 30.4 trillion cubic feet of natural gas.
A Glimpse at Chevron Corp's Dividend History
Chevron Corp has maintained a consistent dividend payment record since 1984, distributing dividends on a quarterly basis. The company has increased its dividend each year since 1988, thus qualifying as a dividend aristocrata designation for companies that have increased their dividend annually for at least the past 36 years.
Breaking Down Chevron Corp's Dividend Yield and Growth
As of today, Chevron Corp currently has a 12-month trailing dividend yield of 3.77% and a 12-month forward dividend yield of 3.99%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, Chevron Corp's annual dividend growth rate was 5.40%, extending to 6.00% per year over a five-year horizon, and a 4.20% annual growth rate over the past decade. Based on these metrics, the 5-year yield on cost of Chevron Corp stock as of today is approximately 5.05%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of March 31, 2024, Chevron Corp's dividend payout ratio is 0.49, indicating a balance between distributing earnings and retaining funds for future growth. The company's profitability rank of 6 out of 10 suggests fair profitability, with net profit reported in 8 of the past 10 years.
Growth Metrics: The Future Outlook
Ensuring the sustainability of dividends requires robust growth metrics. Chevron Corp's growth rank of 6 out of 10 suggests a fair growth outlook. The company's revenue per share and the 3-year revenue growth rate of approximately 28.60% per year, outperforming about 71.08% of global competitors, indicates a strong revenue model.
Conclusion and Next Steps
The analysis of Chevron Corp's dividend payments, growth rate, payout ratio, profitability, and growth metrics suggests a strong foundation for continued dividend sustainability and growth. This positions Chevron as an attractive option for value investors focused on reliable dividend income. For more detailed analysis and other high-dividend yield opportunities, GuruFocus Premium users can explore using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
