High Yield Potential in Oil and Consumer Goods Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Should l Buy CVX?
Source: Fool
- Chevron's Stable Returns: Chevron boasts a 4% dividend yield and has increased its dividend for 37 consecutive years, with plans to grow earnings per share and free cash flow by at least 10% by 2030 when Brent crude prices are at $70, providing a robust cushion amid oil price volatility.
- Strong Financial Foundation: Chevron expects to achieve free cash flow breakeven at $50 per barrel of Brent, demonstrating its solid financial health and ability to navigate market fluctuations, ensuring long-term returns for shareholders.
- Kimberly-Clark's Acquisition Strategy: Kimberly-Clark is acquiring Kenvue at a price below $100, aiming for completion by 2026; despite facing growth stagnation and cost pressures, the company is optimistic about achieving billions in annual cost synergies post-acquisition.
- Sustained Dividend Growth: On January 27, Kimberly-Clark announced an increase in its quarterly dividend from $1.26 to $1.28 per share, which, while modest, marks its 54th consecutive year of dividend increases, reinforcing its status as a Dividend King and appealing to income-seeking investors.
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Analyst Views on CVX
Wall Street analysts forecast CVX stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for CVX is 176.95 USD with a low forecast of 158.00 USD and a high forecast of 206.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
19 Analyst Rating
15 Buy
4 Hold
0 Sell
Strong Buy
Current: 178.040
Low
158.00
Averages
176.95
High
206.00
Current: 178.040
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.
Chevron Reports Strong Q4 Earnings Amid Analyst Upgrades
- Analyst Rating Upgrades: JPMorgan analyst Arun Jayaram reiterated an Overweight rating for Chevron, raising the price target from $176 to $181, reflecting confidence in the company's future performance.
- Stable Cash Flow Guidance: Despite a production impact from a power distribution failure at TCO, Chevron reaffirmed its 2026 free cash flow guidance of $6 billion, indicating a stable financial outlook amid challenges.
- Venezuela Production Growth: Chevron expects production in Venezuela to increase by 50% over the next 18-24 months from the current output of 250,000 barrels per day, significantly enhancing the company's overall production capacity and market share.
- Capital Return Strategy: Chevron is projected to deliver approximately $26 billion in total shareholder returns in 2026 and 2027, reflecting the value in the company's upstream portfolio, particularly in high-return projects in Guyana, Kazakhstan, and the Gulf of America.
See More
U.S. Intensifies Competition in Critical Minerals Sector
- Critical Minerals Strategy: The U.S. government has prioritized critical minerals as a national security issue, launching a strategic stockpile initiative called 'Project Vault' aimed at enhancing supply chain control for electric vehicles and defense systems, thereby elevating the nation's position in global competition.
- Geopolitical Implications: The intensifying competition between the U.S. and China in the critical minerals sector, particularly in rare earths where China holds about 70% of the global market share, necessitates increased U.S. focus on countries like Colombia, Mexico, and Venezuela to secure resource supply chains.
- Market Volatility Expectations: While the market has largely shrugged off geopolitical tensions, investors remain optimistic about fiscal stimulus and strong earnings growth, anticipating continued volatility, especially in the critical minerals and alternative investment sectors.
- Investment Opportunities: Following the surge in rare earth mining stocks due to the critical minerals stockpile announcement, investors are encouraged to directly invest in commodities rather than related companies to achieve purer market exposure, indicating a growing interest in mining and alternative investments.
See More
Berkshire Stock Rises as Investors Seek Safety, Bolstered by $350 Billion in Cash.
- Cash Reserves: The article discusses the potential benefits of having substantial cash reserves, suggesting that it may not be as detrimental as previously thought.
- Financial Flexibility: It highlights how cash can provide financial flexibility and security, allowing individuals and businesses to navigate uncertain economic conditions more effectively.
- Investment Opportunities: The piece also mentions that having cash on hand can create opportunities for strategic investments when market conditions are favorable.
- Economic Context: The discussion is framed within the current economic landscape, emphasizing the importance of liquidity in times of volatility.
See More
Chevron's Dividend Investment Advantage Over Exxon
- Market Capital Comparison: Chevron's market cap stands at approximately $350 billion, which, while lower than Exxon's nearly $600 billion, still positions it among the world's largest energy companies, highlighting its significant market presence.
- ROCE Trends: Chevron's return on capital employed (ROCE) typically remains within the normal range of its peers, albeit slightly lower than Exxon's; however, both companies exhibit similar ROCE trends, indicating stable investment efficiency.
- Financial Stability: With a debt-to-equity ratio of 0.17, Exxon boasts the strongest balance sheet among peers, while Chevron's ratio is 0.22; despite Exxon's financial superiority, both firms have the capacity to support their businesses and dividends during market downturns.
- Dividend Yield Advantage: Chevron offers a dividend yield of approximately 3.9%, surpassing Exxon's 2.9%, translating to about a 33% income boost for investors focused on yield, making Chevron the preferred choice for dividend investors.
See More
Financial Comparison of ExxonMobil and Chevron
- Market Capitalization Comparison: ExxonMobil boasts a market cap nearing $600 billion, while Chevron stands at approximately $350 billion; despite Exxon's larger size, both are among the world's largest energy companies, highlighting their significant market presence.
- Return on Capital Analysis: ExxonMobil's return on capital employed (ROCE) surpasses Chevron's, although both companies exhibit similar ROCE trends, with Chevron's typically falling within the normal range of its peers, indicating effective capital investment strategies for both.
- Financial Robustness: ExxonMobil's debt-to-equity ratio of around 0.17 positions it ahead of Chevron's 0.22, demonstrating Exxon's superior financial health, which allows it to better support operations and dividends during market downturns.
- Dividend Yield Comparison: Chevron offers a dividend yield of approximately 3.9%, exceeding Exxon's 2.9%, making it a more attractive option for income-focused investors, translating to about a 33% boost in income potential.
See More
Chevron Signs MOU for Offshore Exploration in Syria
- Energy Cooperation MOU: Chevron has signed a memorandum of understanding with the Syrian Petroleum Company and Qatari firm UCC Holding to evaluate offshore oil and gas exploration in Syria, marking the country's first formal step toward offshore energy development aimed at expanding hydrocarbon production capabilities.
- Historical Context: Before Syria's nearly 15-year civil war, the oil sector was a critical part of the economy, producing 380,000 barrels per day in 2010 and generating over $3 billion in export revenue, highlighting the significant potential in the energy sector.
- Existing Project Commitment: Chevron also reaffirmed its commitment to developing the Yoyo-Yolanda gas project, which straddles the maritime border between Equatorial Guinea and Cameroon, containing approximately 2.5 trillion cubic feet of gas, further solidifying its energy footprint in West Africa.
- Market Impact: This collaboration not only aids Syria in revitalizing its energy industry but may also attract more foreign investment into the country, driving economic recovery while providing Chevron with new strategic opportunities in the Middle East.
See More
Chevron Reports Strong Q4 Earnings Amid Analyst Upgrades
- Analyst Rating Upgrades: JPMorgan analyst Arun Jayaram reiterated an Overweight rating for Chevron, raising the price target from $176 to $181, reflecting confidence in the company's future performance.
- Stable Cash Flow Guidance: Despite a production impact from a power distribution failure at TCO, Chevron reaffirmed its 2026 free cash flow guidance of $6 billion, indicating a stable financial outlook amid challenges.
- Venezuela Production Growth: Chevron expects production in Venezuela to increase by 50% over the next 18-24 months from the current output of 250,000 barrels per day, significantly enhancing the company's overall production capacity and market share.
- Capital Return Strategy: Chevron is projected to deliver approximately $26 billion in total shareholder returns in 2026 and 2027, reflecting the value in the company's upstream portfolio, particularly in high-return projects in Guyana, Kazakhstan, and the Gulf of America.
See More
U.S. Intensifies Competition in Critical Minerals Sector
- Critical Minerals Strategy: The U.S. government has prioritized critical minerals as a national security issue, launching a strategic stockpile initiative called 'Project Vault' aimed at enhancing supply chain control for electric vehicles and defense systems, thereby elevating the nation's position in global competition.
- Geopolitical Implications: The intensifying competition between the U.S. and China in the critical minerals sector, particularly in rare earths where China holds about 70% of the global market share, necessitates increased U.S. focus on countries like Colombia, Mexico, and Venezuela to secure resource supply chains.
- Market Volatility Expectations: While the market has largely shrugged off geopolitical tensions, investors remain optimistic about fiscal stimulus and strong earnings growth, anticipating continued volatility, especially in the critical minerals and alternative investment sectors.
- Investment Opportunities: Following the surge in rare earth mining stocks due to the critical minerals stockpile announcement, investors are encouraged to directly invest in commodities rather than related companies to achieve purer market exposure, indicating a growing interest in mining and alternative investments.
See More
Berkshire Stock Rises as Investors Seek Safety, Bolstered by $350 Billion in Cash.
- Cash Reserves: The article discusses the potential benefits of having substantial cash reserves, suggesting that it may not be as detrimental as previously thought.
- Financial Flexibility: It highlights how cash can provide financial flexibility and security, allowing individuals and businesses to navigate uncertain economic conditions more effectively.
- Investment Opportunities: The piece also mentions that having cash on hand can create opportunities for strategic investments when market conditions are favorable.
- Economic Context: The discussion is framed within the current economic landscape, emphasizing the importance of liquidity in times of volatility.
See More
Chevron's Dividend Investment Advantage Over Exxon
- Market Capital Comparison: Chevron's market cap stands at approximately $350 billion, which, while lower than Exxon's nearly $600 billion, still positions it among the world's largest energy companies, highlighting its significant market presence.
- ROCE Trends: Chevron's return on capital employed (ROCE) typically remains within the normal range of its peers, albeit slightly lower than Exxon's; however, both companies exhibit similar ROCE trends, indicating stable investment efficiency.
- Financial Stability: With a debt-to-equity ratio of 0.17, Exxon boasts the strongest balance sheet among peers, while Chevron's ratio is 0.22; despite Exxon's financial superiority, both firms have the capacity to support their businesses and dividends during market downturns.
- Dividend Yield Advantage: Chevron offers a dividend yield of approximately 3.9%, surpassing Exxon's 2.9%, translating to about a 33% income boost for investors focused on yield, making Chevron the preferred choice for dividend investors.
See More
Financial Comparison of ExxonMobil and Chevron
- Market Capitalization Comparison: ExxonMobil boasts a market cap nearing $600 billion, while Chevron stands at approximately $350 billion; despite Exxon's larger size, both are among the world's largest energy companies, highlighting their significant market presence.
- Return on Capital Analysis: ExxonMobil's return on capital employed (ROCE) surpasses Chevron's, although both companies exhibit similar ROCE trends, with Chevron's typically falling within the normal range of its peers, indicating effective capital investment strategies for both.
- Financial Robustness: ExxonMobil's debt-to-equity ratio of around 0.17 positions it ahead of Chevron's 0.22, demonstrating Exxon's superior financial health, which allows it to better support operations and dividends during market downturns.
- Dividend Yield Comparison: Chevron offers a dividend yield of approximately 3.9%, exceeding Exxon's 2.9%, making it a more attractive option for income-focused investors, translating to about a 33% boost in income potential.
See More
Chevron Signs MOU for Offshore Exploration in Syria
- Energy Cooperation MOU: Chevron has signed a memorandum of understanding with the Syrian Petroleum Company and Qatari firm UCC Holding to evaluate offshore oil and gas exploration in Syria, marking the country's first formal step toward offshore energy development aimed at expanding hydrocarbon production capabilities.
- Historical Context: Before Syria's nearly 15-year civil war, the oil sector was a critical part of the economy, producing 380,000 barrels per day in 2010 and generating over $3 billion in export revenue, highlighting the significant potential in the energy sector.
- Existing Project Commitment: Chevron also reaffirmed its commitment to developing the Yoyo-Yolanda gas project, which straddles the maritime border between Equatorial Guinea and Cameroon, containing approximately 2.5 trillion cubic feet of gas, further solidifying its energy footprint in West Africa.
- Market Impact: This collaboration not only aids Syria in revitalizing its energy industry but may also attract more foreign investment into the country, driving economic recovery while providing Chevron with new strategic opportunities in the Middle East.
See More
