- Dividend yield: 3.19%
- P/E: 10
It’s hard to go wrong with an oil and gas play, despite the ups and downs found in the energy sector, and Chevron (CVX) is one of the proven winners in the field.
CVX operates in both the upstream exploration and extraction of oil and gas reserves, and downstream distribution and marketing for those products, so they’ve got both primary sides of the business covered.
Like everyone else, Chevron is investing heavily in finding new sources of both oil and gas, tapping markets in in Africa, Australia and and China, all the while working domestic production sites including those in the Marcellus shale fields in Pennsylvania, Ohio and West Virginia. Those new global areas are expected to increase oil production by 1% over the next year (2014) and up to 5% over the following four years, according to Dividend Growth Investor estimates.
Despite some up-and-down earnings over the past three years and massive capital expenditure spending to spur future growth, the coffers are hardly bare: Chevron sat on $20 billion in cash at the end of fiscal 2012, and pumped out nearly $40 billion in net operating cash flow. With a payout ratio sitting at an almost miserly 30%, CVX should easily extend its 26-year consecutive year streak of increasing dividends for the long term, providing income in March, June, September and December.