Lagging Dependable Dividend Stocks #5: Chevron (CVX)
Dividend Yield: 3.5%
YTD Performance: -7.1%
Big Oil stalwart Chevron (CVX) has seen its share price tumble 7% this year. That’s a most atypical move for the normally stellar oil giant, especially when you consider CVX stock has nearly doubled over the past five years. So, why has the stock come under fire of late?
The simplest answer is earnings weakness. In fact, Chevron has experienced a sharp drop of 7% in revenue and a 31% decline in income in its most-recent quarter. It’s also facing metrics you don’t want to see in dependable dividend stocks, including increased costs and declining margins.
Now, before you go out and sell your CVX stock, keep in mind that Chevron remains a gargantuan profit machine with several very large projects in the works such as the Gorgon and Wheatstone natural gas development in Australia.
I suspect that in the long term, the recent decline in Chevron metrics and CVX stock will be a blip on their radar. Long-term investors may want to think about building a position in CVX, the first of our lagging dependable dividend stocks.