Top Dividend Stocks #8: Chevron (CVX)
Dividend Yield: 3.18%
YTD Performance: +0.66%
52-Week Return: +4.74%
Chevron (NYSE:CVX) is one of the largest and most well-known integrated energy companies on the planet and boasts a record of consecutive dividend increases over the last 25 years. On top of the dividend, the biggest factor that makes CVX a smart investment at this time is its future growth prospects.
The company expects to increase its capacity by 20% over the next four years, and while it has been primarily centered on exploring for and producing oil, it’s now branching out into the natural gas space and is either involved in or planning liquefied natural gas drilling operations outside of the U.S. in places like China and Australia. CVX also plans to increase revenues by drilling in the U.S. Permian Basin region (production in the region is expected to double over the course of the decade) and through its Texas-New Mexico project.
Even with such strong growth prospects, CVX trades with a reasonable valuation compared to other energy stocks. With a P/E ratio of 11.2 — compared to Exxon’s (NYSE:XOM) 13.6, its valuation is very enticing. CVX also bests XOM in earnings growth, profitability and dividend growth and dividend yield, which are the metrics that investors will consider when determining which stock is the better buy.
As other countries warm up to the idea of hydraulic fracturing and natural gas in general, Chevron is prepared to move in and accelerate the process, and you should be prepared to profit from the natural gas revolution as well.