S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
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MarketBeat Week in Review – 4/8 - 4/12
Argentina's populist president meets billionaire Elon Musk in Texas — and a bromance is born
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It's almost April 15. Here's how to reduce stress and get your taxes done
Nearing 50 Supreme Court arguments in, lawyer Lisa Blatt keeps winning
How O.J. Simpson burned the Ford Bronco into America's collective memory
S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Trends You Need to Know This Quarter
MarketBeat Week in Review – 4/8 - 4/12
Argentina's populist president meets billionaire Elon Musk in Texas — and a bromance is born
Diplomat tapped as Latvia's new foreign minister as incumbent quits following flights scandal
It's almost April 15. Here's how to reduce stress and get your taxes done
Nearing 50 Supreme Court arguments in, lawyer Lisa Blatt keeps winning
How O.J. Simpson burned the Ford Bronco into America's collective memory
S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Trends You Need to Know This Quarter
MarketBeat Week in Review – 4/8 - 4/12
Argentina's populist president meets billionaire Elon Musk in Texas — and a bromance is born
Diplomat tapped as Latvia's new foreign minister as incumbent quits following flights scandal
It's almost April 15. Here's how to reduce stress and get your taxes done
Nearing 50 Supreme Court arguments in, lawyer Lisa Blatt keeps winning
How O.J. Simpson burned the Ford Bronco into America's collective memory
S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Trends You Need to Know This Quarter
MarketBeat Week in Review – 4/8 - 4/12
Argentina's populist president meets billionaire Elon Musk in Texas — and a bromance is born
Diplomat tapped as Latvia's new foreign minister as incumbent quits following flights scandal
It's almost April 15. Here's how to reduce stress and get your taxes done
Nearing 50 Supreme Court arguments in, lawyer Lisa Blatt keeps winning
How O.J. Simpson burned the Ford Bronco into America's collective memory

Chevron is Likely to Increase its Dividend Before Earnings

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Chevron is Likely to Increase its Dividend Before Earnings

Key Points

  • Based on its record 2022 performance, Chevron is expected to announce a dividend increase when it reports earnings on January 27.  
  • The company has plans to increase its operational efficiency which should ensure that this won’t be the end of the dividend increases. 
  • Chevron is also selectively investing in renewable energy. 
  • CVX stock appears to be forming a new base of support that could launch the stock higher.  
  • 5 stocks we like better than Chevron

The Chevron Corporation NYSE: CVX will report earnings on Friday, January 27th. At this time, the company is expected to post earnings per share of $4.27 on revenue of $53.97 billion. This won't be a record level of profits or earnings, but it will continue the company's eight-quarter streak of year-over-year (YOY) increases on both the top and bottom lines.  

But that's not the only reason investors should be optimistic about the oil and gas giant's quarterly report. Before the company releases earnings, it's widely expected that Chevron will announce an increase in its quarterly dividend. This will make it 37 consecutive years that the oil and gas giant has increased its dividend.  

A growing, well-supported dividend would allow shareholders to continue to own CVX stock. However, Chevron has a more powerful growth story both in its traditional oil and gas business and in the renewable sector. 

Pumping Smarter, Not Harder 

Forgive the cliché, but it accurately describes the strategy that Chevron laid out for investors at its most recent Investors Day presentation. First, the company plans to reduce unit operating expenses. This should increase the company's margins. At the same time, the company prepares for its total capital and exploratory expenditures (C&E) to average between $15 billion and $17 billion per year through 2025.  

To accomplish this, Chevron plans to increase output in its Permian basin operations. The company believes that it can increase net production to 4mbpd through 2031. This means the company's already strong free cash flow should improve. This means that this dividend increase will likely not be the last.  

Looking at the company's balance sheet through a wider lens, Chevron believes it will be operating in a cash-balanced neutral state even if Brent crude falls to $50 a barrel as opposed to about $70 today.  

How is Chevron Investing in Renewable Energy? 

Chevron's efforts to operate in an environment of falling crude prices is a savvy move, even though the world will need fossil fuels for much longer than many care to admit. But there's no doubt that governments worldwide are incentivizing the production of renewable energy and clean energy projects. 


But that's the intriguing part of many traditional oil and gas companies, including Chevron. They've been making investments in renewable energy for decades.  

Specifically, Chevron is not investing in specific wind or solar projects but in renewable fuels. One of the company's key initiatives is as one of the world's leading exporters of liquefied natural gas (LNG).  

And right now, that means transporting a significant amount of LNG to Europe. Since Russia invaded Ukraine, European countries have been looking for different LNG suppliers, which is one area Chevron is leading. And the company is also making strategic investments in renewable natural gas, renewable diesel and sustainable aviation fuel because they see those areas where it can help add value.  

What Analysts Are Saying 

Since the beginning of the year, analysts have given Chevron mixed reviews. All four analysts tracked by MarketBeat have increased their price target for CVX stock. However, two analysts have downgraded the stock from a Buy to Neutral.  

From a technical perspective, CVX stock is trading near the top of its 52-week range, but it is starting to show a base of support at around $177, which could be the catalyst for launching the stock higher.  

→ My biggest AI fear (From Paradigm Press) (Ad)

Should you invest $1,000 in Chevron right now?

Before you consider Chevron, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Chevron wasn't on the list.

While Chevron currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Chevron (CVX)
4.9007 of 5 stars
$158.96-1.8%4.10%13.99Moderate Buy$183.60
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Chris Markoch

About Chris Markoch

  • CTMarkoch@msn.com

Editor & Contributing Author

Retirement, Individual Investing

Experience

Chris Markoch has been an editor & contributing writer for MarketBeat since 2018.

Areas of Expertise

Value investing, retirement stocks, dividend stocks

Education

Bachelor of Arts, The University of Akron

Past Experience

InvestorPlace


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