Current Dividend Yield: 3.1%
Performance So Far in 2012: +8% (vs. +11% for the Dow Jones Industrial Average)
Chevron (NYSE:CVX) is smaller than Exxon Mobil (NYSE:XOM), but it’s hardly an also-ran in energy. CVX has a market cap of about $225 billion, making it one of the 10 largest corporations that trade on American stock exchanges. The oil major also generates more than $200 billion a year in revenue, placing it on the top 10 list of U.S.-listed corporations on that front, too.
Oil stocks like Chevron can be cyclical, but to some that makes CVX a good investment now — since the prospect of brighter days (or at least stronger energy demand) in 2013 could make this a prime time to buy. There’s incentive to get in a bit early, too, since baseline demand is strong. Also, geopolitical unrest in the Middle East also ensures that crude won’t be dipping significantly in the near-term, even if energy needs soften slightly. A pretty consistent crude oil pricing in the ballpark of the low $90s per barrel since July is encouraging.
So why not collect a hefty dividend of roughly 3.1% while you wait for a cyclical recovery to lift Big Oil stocks like Chevron? Seems like a no-brainer for investors looking for a low-risk way to enter the market right now and earn dividends while they wait.
Chevron reports earnings Nov. 2, so watch closely if you’re planning to invest. Also worth noting is the massive war chest of $21.5 billion in cash that implies Chevron could be plotting a huge buyout soon.