Here’s a way to increase your income from dividend stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 18 2024
0mins
Should l Buy CVX?
Source: MarketWatch
- Investors Seeking Income: Many investors in the stock market are looking for income in addition to growth.
- Strategies for Increasing Income: Investors can consider writing covered call options as a way to increase income from stock investments.
- Alternative to Dividend Yields: Writing covered calls offers an alternative approach to generating income compared to stocks with high dividend yields.
- Understanding Covered Calls: Covered calls involve selling call options on stocks that an investor already owns.
- Potential Benefits: This strategy can provide additional income and potentially enhance overall returns for investors.
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Analyst Views on CVX
Wall Street analysts forecast CVX stock price to fall
19 Analyst Rating
15 Buy
4 Hold
0 Sell
Strong Buy
Current: 205.210
Low
158.00
Averages
176.95
High
206.00
Current: 205.210
Low
158.00
Averages
176.95
High
206.00
About CVX
Chevron Corporation is an integrated energy company. The Company produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance its business and industry. The Company’s segments include Upstream and Downstream. Upstream operations consist primarily of exploring for, developing, producing and transporting crude oil and natural gas; liquefaction, transportation and regasification associated with LNG; transporting crude oil by major international oil export pipelines; processing, transporting, storage and marketing of natural gas; carbon capture and storage; and a gas-to-liquids plant. Downstream operations consist primarily of the refining of crude oil into petroleum products; marketing crude oil, refined products, and lubricants; manufacturing and marketing of renewable fuels, and transporting of crude oil and refined products by pipeline, marine vessel, motor equipment and rail car.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Peace Plan Delivery: According to The New York Times, the U.S. has sent a 15-point peace plan to Iran through Pakistan, aiming to facilitate negotiations between the warring parties, which could provide a new opportunity for conflict resolution.
- Military Deployment Preparations: Concurrently, The Wall Street Journal reported that the Pentagon is preparing to deploy about 3,000 soldiers from the Army's 82nd Airborne Division to the Middle East, a military move that could escalate regional tensions and further impact global markets.
- Global Energy Emergency: The Philippines has become the first country to declare a 'national energy emergency' due to the ongoing conflict, indicating that the conflict poses a growing threat to global energy supply chains, potentially leading to fluctuations in international oil prices.
See More
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- Energy Crisis Warning: Chevron's head of oil refining cautioned that California may face an energy crisis due to the Iran war, stating that the company might exit refining in the state unless taxes and regulations are rolled back.
- Import Dependency Risks: California imports approximately 20% of its refined fuels from Asia, and with the effective shutdown of the Strait of Hormuz, shipments from China, South Korea, and Singapore are at risk of significant slowdown, potentially leading to fuel shortages in the state.
- Surging Prices: California consumers are paying an average of $5.82 per gallon for gasoline, significantly higher than the national average of just below $4, while diesel prices have reached an all-time high of $7.018 per gallon, highlighting the state's vulnerability to energy price fluctuations.
- Pessimistic Outlook: Chevron estimates that new emissions rules proposed by the California Air Resources Board could increase costs for remaining refineries by $500 million within five years, and if the tax on refineries remains, California could lose all its refineries in the next decade.
See More
Middle East Conflict Drives Oil and Gas Price Surge
- Surge in Energy Prices: The geopolitical conflict in the Middle East has led to a significant rise in oil and gas prices, with ExxonMobil and Chevron seeing stock increases of 2.54% and 0.77% respectively, making them top picks for long-term investors.
- Integrated Value Chain: Both Exxon and Chevron operate across the entire energy value chain, including upstream production, midstream transportation, and downstream refining, which helps stabilize income during oil price fluctuations and reduces investment risk.
- Strong Financial Health: With debt-to-equity ratios around 0.2x and 0.25x, both companies have the flexibility to incur debt during downturns, allowing them to maintain operations and dividends, thus ensuring returns for investors.
- Consistent Dividend Yields: Exxon offers a dividend yield of 2.5% while Chevron provides 3.5%, with both companies having increased their dividends for over 25 years, demonstrating their commitment to shareholders and financial stability.
See More
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- Rising Oil Prices Context: The geopolitical conflict in the Middle East has led to a significant rise in oil and natural gas prices, drawing attention from investors in the energy sector, particularly those looking to hold investments long-term while considering the risks of future price declines.
- Business Advantage Analysis: Both ExxonMobil and Chevron benefit from high oil prices in upstream production, but they also diversify their income through midstream transportation and downstream chemical and refining operations, enhancing their ability to withstand oil price volatility.
- Financial Stability: With low debt-to-equity ratios (approximately 0.2x for Exxon and 0.25x for Chevron), both companies can increase debt during industry downturns, allowing them to continue supporting their operations and dividends, ensuring stable returns for investors.
- Dividend Appeal: Exxon offers a dividend yield of 2.5% and Chevron 3.5%, both having increased dividends for over 25 years, making them attractive for income-seeking investors, especially in the context of rising oil prices.
See More
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- Significant Oil Price Drop: Oil prices fell over 5% after President Trump announced ongoing negotiations with Iran, with Brent crude futures declining nearly 6% to $98.31 per barrel and WTI down 5% to $87.65, reflecting market sensitivity to geopolitical risks.
- Negotiation Dynamics Shift: Trump indicated he had retracted threats to strike Iranian energy infrastructure based on negotiation progress, which could alter market expectations for future oil prices, despite Iran denying direct talks with the U.S.
- Supply Disruption Impact: Goldman Sachs highlighted that the current disruption in oil supplies represents the largest shock in decades, significantly affecting global supply shares and increasing market uncertainty, prompting investors to hedge against potential worst-case scenarios.
- Geopolitical Risk Premium: According to Goldman, short-term crude price movements are driven more by shifts in perceived worst-case probabilities rather than changes in the fundamental outlook, with expectations that flows through the Strait of Hormuz will normalize over a four-week period, further influencing oil price trends.
See More
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Venezuelan Opposition Leader's Proposal: Maria Corina Machado, a prominent opposition figure in Venezuela, advocates for the complete privatization of the country's oil industry.
Engagement with Energy Executives: Machado presented her vision during a meeting with energy executives in Houston, highlighting her plans for Venezuela's energy sector.
See More
