Stock of the Day

May 16, 2023

Chevron (CVX)

$139.66
+$2.76 (+2.0%)
Market Cap: $243.94B

About Chevron

Chevron Corporation, through its subsidiaries, engages in the integrated energy and chemicals operations in the United States and internationally. The company operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, production, and transportation of crude oil and natural gas; processing, liquefaction, transportation, and regasification of liquefied natural gas; transportation of crude oil through pipelines; transportation, storage, and marketing of natural gas; and carbon capture and storage, as well as a gas-to-liquids plant. The Downstream segment refines crude oil into petroleum products; markets crude oil, refined products, and lubricants; manufactures and markets renewable fuels, commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives; and transports crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car. The company was formerly known as ChevronTexaco Corporation and changed its name to Chevron Corporation in 2005. Chevron Corporation was founded in 1879 and is headquartered in San Ramon, California.

Chevron Bull Case

Here are some ways that investors could benefit from investing in Chevron:

  • The current stock price is around $140, which may present a buying opportunity for investors looking for value in the energy sector.
  • Chevron recently reported earnings per share (EPS) of $2.18, exceeding analyst expectations, indicating strong financial performance.
  • The company has declared a quarterly dividend of $1.71 per share, reflecting a commitment to returning value to shareholders, with an annualized yield of approximately 5%.
  • Chevron's return on equity stands at 11.44%, suggesting effective management and profitability relative to shareholder equity.
  • Despite a slight decline in revenue compared to the previous year, Chevron's net margin of 8.71% indicates solid profitability in its operations.

Chevron Bear Case

Investors should be bearish about investing in Chevron for these reasons:

  • The company's revenue for the latest quarter was down about 2.3% compared to the same quarter last year, which may raise concerns about growth potential.
  • Several analysts have downgraded Chevron's stock rating, indicating a lack of confidence in its future performance.
  • The stock has a relatively high dividend payout ratio of 78.17%, which could limit the company's ability to reinvest in growth opportunities.
  • Chevron's market cap is substantial, but the stock has shown volatility, with a 12-month high of $168.96 and a low of $132.04, suggesting potential risks for investors.
  • Analysts predict a decrease in EPS for the current fiscal year compared to the previous year, which could signal challenges ahead for the company.
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