Rising Energy Demand Boosts Fossil Fuel Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 hours ago
0mins
Source: Fool
- Fossil Fuel Demand Surge: Soaring energy demands from data centers and a modernizing global economy are expected to boost fossil fuel demand, with rising natural gas exports anticipated to provide stable revenue streams for energy companies despite renewable energy growth.
- Chevron's Reliable Dividends: Chevron (CVX) has increased its dividend for 37 consecutive years, currently yielding 3.7%, and expects a 10% annual growth in free cash flow over the next five years, bolstered by its $55 billion acquisition of Hess to enhance its resource base in Guyana.
- Enbridge's Steady Performance: Enbridge (ENB) has raised its dividend for 28 years, with a current yield of 5% and a responsible payout ratio of 66%, ensuring stable cash flow from its oil and gas transportation and utility operations across North America.
- ExxonMobil's Growth Potential: ExxonMobil (XOM) has raised its dividend for 42 years, currently yielding 2.8%, and has invested $59.5 billion in acquiring Pioneer Natural Resources, doubling its land assets in the Permian Basin, indicating a strong outlook for future dividend increases.
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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: 182.400
Low
158.00
Averages
176.95
High
206.00
Current: 182.400
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 Signs Lease Agreements for Offshore Exploration in Greece
- Lease Agreement Signed: Chevron, through its four Dutch subsidiaries, has signed lease agreements with the Hellenic Republic to explore four offshore blocks south of Crete and in the Peloponnese, holding a 70% operating interest, indicating its strategic intent to expand in the Mediterranean region.
- Exploration Potential Assessment: Under the agreements, the consortium will conduct 2D and 3D seismic exploration in the first phase to assess hydrocarbon potential, laying the groundwork for future energy supplies and enhancing Chevron's resource base.
- Market Position Enhancement: This collaboration not only solidifies Chevron's market position in the Mediterranean but also complements its existing gas field assets in Israel and Cyprus, expected to drive long-term growth and investment returns in the region.
- Strategic Partnership: The partnership with HELLENiQ ENERGY will facilitate technology and resource sharing, enhancing both companies' competitiveness in emerging markets while potentially providing economic benefits and job opportunities for the Greek government.
See More
Chevron Expands Exploration Portfolio in the Mediterranean
- Exploration Investment Expansion: Chevron has signed lease agreements for four offshore blocks in Greece, holding a 70% operating interest, aimed at strengthening its exploration efforts in the Mediterranean, thereby enhancing its market position in the region.
- Seismic Exploration Plans: The consortium will conduct 2D and 3D seismic surveys in the first phase to assess the hydrocarbon potential of these areas, which is expected to lay the groundwork for future development and further drive the company's long-term growth.
- Market Performance Analysis: Despite mixed performance in the overall energy sector, Chevron's stock rose 0.79% to $183.39, approaching its 52-week high of $186.52, indicating a positive impact of company-specific developments on its stock price.
- Analyst Rating Updates: Chevron's stock carries a “Buy” rating with an average price target of $173.71, reflecting market confidence in its future growth potential, although it faces some valuation pressures.
See More
ZIM Announces Merger Agreement with Hapag-Lloyd
- Merger Agreement Details: Hapag-Lloyd will acquire ZIM for $35 per share, valuing the deal at approximately $4.2 billion, which represents a 58% premium over ZIM's share price on February 13, 2026, indicating strong market confidence in ZIM's future.
- Enhanced Market Position: This acquisition will position Hapag-Lloyd as the fifth-largest container shipping company globally, with projected annual cargo volumes exceeding 18 million TEU by 2027, further solidifying its competitive edge in the global shipping market.
- Operational Capability Boost: Post-merger, ZIM will operate 16 vessels under the “New ZIM” entity, expanding its global network and enhancing service capabilities on key trade routes, thereby improving customer experience and market reach.
- Financial Outlook: ZIM is set to release its financial report on March 11, 2026, with an expected EPS loss of 68 cents and revenue of $1.49 billion; despite facing short-term pressures, the long-term value remains promising with a P/E ratio of 2.7, indicating investment opportunities.
See More
Rising Energy Demand Boosts Fossil Fuel Outlook
- Fossil Fuel Demand Surge: Soaring energy demands from data centers and a modernizing global economy are expected to boost fossil fuel demand, with rising natural gas exports anticipated to provide stable revenue streams for energy companies despite renewable energy growth.
- Chevron's Reliable Dividends: Chevron (CVX) has increased its dividend for 37 consecutive years, currently yielding 3.7%, and expects a 10% annual growth in free cash flow over the next five years, bolstered by its $55 billion acquisition of Hess to enhance its resource base in Guyana.
- Enbridge's Steady Performance: Enbridge (ENB) has raised its dividend for 28 years, with a current yield of 5% and a responsible payout ratio of 66%, ensuring stable cash flow from its oil and gas transportation and utility operations across North America.
- ExxonMobil's Growth Potential: ExxonMobil (XOM) has raised its dividend for 42 years, currently yielding 2.8%, and has invested $59.5 billion in acquiring Pioneer Natural Resources, doubling its land assets in the Permian Basin, indicating a strong outlook for future dividend increases.
See More
Energy Companies Show Strong Cash Flows Yet Low Valuations Persist
- Strong Cash Flow Performance: The energy sector's free cash flow yield ranges from 7% to 9%, significantly exceeding the broader market average, indicating enhanced profitability and cash return capabilities, despite overall low valuations.
- Valuation Discrepancy: The S&P 500 Energy sector trades at a forward P/E of approximately 12.5x, well below the broader S&P 500's 21x, suggesting that market pessimism towards the energy sector does not align with its actual financial performance, indicating potential for repricing.
- Shrinking Industry Size: Energy's share of the S&P 500 has dwindled to just 4%, down from over 13% in 2008, reflecting decreased investor attention towards the sector, even as its cash flow and financial health continue to improve.
- Institutional Underweight: Despite strong fundamentals, institutional ownership of energy stocks remains below historical averages, with many portfolios structurally underweight due to ESG-driven divestments and tech sector outperformance, potentially leading to undervalued investment opportunities in the future.
See More
Building Long-Term Wealth with Dividend Stocks
- Dividend Stock Advantages: According to Ned Davis Research, from 1973 to 2024, dividend growers and payers have an average annual total return of 10.24%, significantly outperforming non-payers at 4.31%, highlighting the compelling nature of dividend stocks for long-term investment.
- Microsoft's Growth Potential: Microsoft (MSFT) has averaged a 24% annual gain over the past decade, and despite a 17% decline year-to-date, its dividend yield has risen to 0.9%, with annual dividends increasing from $1.89 in 2019 to $3.64 in 2023, reflecting strong profitability and ongoing shareholder returns.
- Medtronic's Stable Returns: Medtronic (MDT) has raised its dividend by an average of 6% annually over the past decade and has increased its dividend for 48 consecutive years, currently yielding 2.8%, while its second-quarter revenue rose 7% year-over-year, demonstrating robust performance in the medical device sector.
- ETF Investment Opportunity: The Schwab U.S. Dividend Equity ETF (SCHD) offers a 3.5% dividend yield and tracks the Dow Jones U.S. Dividend 100 Index, which includes 100 stocks that have paid dividends for at least 10 years, with a low annual fee of just 0.06%, providing investors with a cost-effective diversified investment option.
See More
Chevron Signs Lease Agreements for Offshore Exploration in Greece
- Lease Agreement Signed: Chevron, through its four Dutch subsidiaries, has signed lease agreements with the Hellenic Republic to explore four offshore blocks south of Crete and in the Peloponnese, holding a 70% operating interest, indicating its strategic intent to expand in the Mediterranean region.
- Exploration Potential Assessment: Under the agreements, the consortium will conduct 2D and 3D seismic exploration in the first phase to assess hydrocarbon potential, laying the groundwork for future energy supplies and enhancing Chevron's resource base.
- Market Position Enhancement: This collaboration not only solidifies Chevron's market position in the Mediterranean but also complements its existing gas field assets in Israel and Cyprus, expected to drive long-term growth and investment returns in the region.
- Strategic Partnership: The partnership with HELLENiQ ENERGY will facilitate technology and resource sharing, enhancing both companies' competitiveness in emerging markets while potentially providing economic benefits and job opportunities for the Greek government.
See More
Chevron Expands Exploration Portfolio in the Mediterranean
- Exploration Investment Expansion: Chevron has signed lease agreements for four offshore blocks in Greece, holding a 70% operating interest, aimed at strengthening its exploration efforts in the Mediterranean, thereby enhancing its market position in the region.
- Seismic Exploration Plans: The consortium will conduct 2D and 3D seismic surveys in the first phase to assess the hydrocarbon potential of these areas, which is expected to lay the groundwork for future development and further drive the company's long-term growth.
- Market Performance Analysis: Despite mixed performance in the overall energy sector, Chevron's stock rose 0.79% to $183.39, approaching its 52-week high of $186.52, indicating a positive impact of company-specific developments on its stock price.
- Analyst Rating Updates: Chevron's stock carries a “Buy” rating with an average price target of $173.71, reflecting market confidence in its future growth potential, although it faces some valuation pressures.
See More
ZIM Announces Merger Agreement with Hapag-Lloyd
- Merger Agreement Details: Hapag-Lloyd will acquire ZIM for $35 per share, valuing the deal at approximately $4.2 billion, which represents a 58% premium over ZIM's share price on February 13, 2026, indicating strong market confidence in ZIM's future.
- Enhanced Market Position: This acquisition will position Hapag-Lloyd as the fifth-largest container shipping company globally, with projected annual cargo volumes exceeding 18 million TEU by 2027, further solidifying its competitive edge in the global shipping market.
- Operational Capability Boost: Post-merger, ZIM will operate 16 vessels under the “New ZIM” entity, expanding its global network and enhancing service capabilities on key trade routes, thereby improving customer experience and market reach.
- Financial Outlook: ZIM is set to release its financial report on March 11, 2026, with an expected EPS loss of 68 cents and revenue of $1.49 billion; despite facing short-term pressures, the long-term value remains promising with a P/E ratio of 2.7, indicating investment opportunities.
See More
Rising Energy Demand Boosts Fossil Fuel Outlook
- Fossil Fuel Demand Surge: Soaring energy demands from data centers and a modernizing global economy are expected to boost fossil fuel demand, with rising natural gas exports anticipated to provide stable revenue streams for energy companies despite renewable energy growth.
- Chevron's Reliable Dividends: Chevron (CVX) has increased its dividend for 37 consecutive years, currently yielding 3.7%, and expects a 10% annual growth in free cash flow over the next five years, bolstered by its $55 billion acquisition of Hess to enhance its resource base in Guyana.
- Enbridge's Steady Performance: Enbridge (ENB) has raised its dividend for 28 years, with a current yield of 5% and a responsible payout ratio of 66%, ensuring stable cash flow from its oil and gas transportation and utility operations across North America.
- ExxonMobil's Growth Potential: ExxonMobil (XOM) has raised its dividend for 42 years, currently yielding 2.8%, and has invested $59.5 billion in acquiring Pioneer Natural Resources, doubling its land assets in the Permian Basin, indicating a strong outlook for future dividend increases.
See More
Energy Companies Show Strong Cash Flows Yet Low Valuations Persist
- Strong Cash Flow Performance: The energy sector's free cash flow yield ranges from 7% to 9%, significantly exceeding the broader market average, indicating enhanced profitability and cash return capabilities, despite overall low valuations.
- Valuation Discrepancy: The S&P 500 Energy sector trades at a forward P/E of approximately 12.5x, well below the broader S&P 500's 21x, suggesting that market pessimism towards the energy sector does not align with its actual financial performance, indicating potential for repricing.
- Shrinking Industry Size: Energy's share of the S&P 500 has dwindled to just 4%, down from over 13% in 2008, reflecting decreased investor attention towards the sector, even as its cash flow and financial health continue to improve.
- Institutional Underweight: Despite strong fundamentals, institutional ownership of energy stocks remains below historical averages, with many portfolios structurally underweight due to ESG-driven divestments and tech sector outperformance, potentially leading to undervalued investment opportunities in the future.
See More
Building Long-Term Wealth with Dividend Stocks
- Dividend Stock Advantages: According to Ned Davis Research, from 1973 to 2024, dividend growers and payers have an average annual total return of 10.24%, significantly outperforming non-payers at 4.31%, highlighting the compelling nature of dividend stocks for long-term investment.
- Microsoft's Growth Potential: Microsoft (MSFT) has averaged a 24% annual gain over the past decade, and despite a 17% decline year-to-date, its dividend yield has risen to 0.9%, with annual dividends increasing from $1.89 in 2019 to $3.64 in 2023, reflecting strong profitability and ongoing shareholder returns.
- Medtronic's Stable Returns: Medtronic (MDT) has raised its dividend by an average of 6% annually over the past decade and has increased its dividend for 48 consecutive years, currently yielding 2.8%, while its second-quarter revenue rose 7% year-over-year, demonstrating robust performance in the medical device sector.
- ETF Investment Opportunity: The Schwab U.S. Dividend Equity ETF (SCHD) offers a 3.5% dividend yield and tracks the Dow Jones U.S. Dividend 100 Index, which includes 100 stocks that have paid dividends for at least 10 years, with a low annual fee of just 0.06%, providing investors with a cost-effective diversified investment option.
See More
