Last Friday, Chevron Corporation (NYSE:CVX) reported disappointing results for the fourth quarter. Earnings came to 23 cents a share and revenues were $31.5 billion. Yet the Street was looking for earnings of 64 cents a share and revenues of nearly $37 billion. CVX stock dropped about 2.4% on the news.

The company blamed pressures on margins from the refining business, which suffered a 65% drop in earnings to $357 million, and also heavier tax charges. No doubt, the relatively low prices in crude oil and gas prices continue to have an impact.

Keep in mind that Chevron stock has already had a big move, as Wall Street has anticipated a turnaround in the core operations. During the past year, CVX stock has logged an impressive 27% return.

So perhaps it is time for investors to hold off? Or is there still more room for upside on Chevron stock? Let’s take a look at three pros and three cons.

CVX Stock Pros

Transformation: The roots of Chevron go back to the 1870s, which means the company knows how to manage through wrenching changes and remain a dominant operator. Keep in mind that CVX is the second-largest oil company in the U.S.

With the volatility in crude prices during the last couple years, the company has certainly taken swift actions to adapt. Last year, there was a 34% cut in capital expenditures to $11.6 billion. There was also a 9% drop in operating expenses to $2.5 billion. And Chevron plans to continue with its cost-cutting efforts for 2017.

Despite all this, the company is still mindful of its long-term sustainability. To this end, CVX expects to plow resources into key investments, such as the Gorgon and Wheatstone LNG projects in Australia, deepwater projects in the Gulf of Mexico and drilling in the Permian basin (based in Texas and New Mexico). In fact, the Permian fields could account for a hefty 25% of production by 2025.

The Trump Factor: It’s obvious that the administration plans to pursue aggressively pro-energy policies. Of course, President Trump has wasted little time with this. Just last week, he signed an executive order that allowed for the construction of the controversial Keystone XL pipeline.

What’s more, Trump has nominated Exxon Mobil Corporation (NYSE:XOM) Rex Tillerson for the exalted position of Secretary of State. But there are other key nominations as well. For example, Trump has named Oklahoma Attorney General Scott Pruitt to run the Environmental Protection Agency and former Texas governor Rick Perry to head the Energy Department.

So going forward, there will likely be much fewer regulations for oil producers, such as with permitting, leasing and even environmental restrictions. Overall, these will not only mean improved margins but also the potential to expand production at a quicker pace.

Dividend and Financials: For 29 consecutive years, Chevron has increased its dividend payout. Currently, the yield is 3.71%. As a result, CVX stock has been able to produce average total returns of 8.6% for the past decade.

The company also continues to generate substantial cash flows to maintain its favorable stance on its dividend. Last year, Chevron reported operating cash flows of $12.8 billion.

CVX Stock Cons

Volatility: The last few years are a clear reminder that energy prices are subject to major swings. This volatility is clear as West Texas Intermediate hit the mid-$30s last year.

There are many, often unpredictable, factors that can have a major affect. Some of these factors include new technologies (like unconventional drilling through fracking), geopolitical events, the value of the U.S. dollar, global growth and yes, the decisions from the Organization of the Petroleum Exporting Countries.

Even more important, energy prices are subject to prolonged gluts. This is what happened from the 1980s to 1990s.

Valuation: With the run-up in CVX stock, the forward price-to-earnings multiple is now at a pricey 17X. Because of this, the valuation is at a premium to most other mega oil operators, as seen with the following chart:

Company	Forward Price-to-Earnings Multiple
Exxon Mobil	17X
Total SA (ADR) (NYSE:TOT)	11X
BP plc (ADR) (NYSE:BP)	14X
Royal Dutch Shell plc (ADR)(NYSE:RDS.A, NYSE:RDS.B)	14X

What’s more, the dividend payouts are more attractive. For example, BP and RDS have yields that are over 6%.

Reserves: These are critical for the long-term growth of an oil operator. And yes, CVX has done a decent job in finding new reserves, adding about 900 million barrels in 2016. These come to roughly 95 of the annual production.

Yet there are some issues. First of all, estimates on reserves can be far from full-proof. As noted in the CVX 10-K: “Creating and maintaining an inventory of projects depends on many factors, including obtaining and renewing rights to explore, develop and produce hydrocarbons; drilling success; ability to bring long-lead-time, capital-intensive projects to completion on budget and on schedule; and efficient and profitable operation of mature properties.”

More importantly, Chevron’s aggressive cost cutting – as well as large dividend payouts — may ultimately mean lower reserve levels for the future.

Bottom Line on Chevron Stock

CVX management has shown it knows how to take tough actions and pull off a successful turnaround. And despite the cuts, the company has still been able to find ways to improve reserves. Although, the recent firming of crude prices has been a big help and there is also enthusiasm with the Trump administration.

The problem is that Chevron stock has already factored in much of this, with the earnings multiple at a premium to many of the company’s peers.

So what to do? It’s probably best to hold off on CVX stock for now. Rather, there are other oil stocks that are much cheaper and also sport higher dividend yields.

Tom Taulli runs the InvestorPlace blog IPO Playbook and is a registered investment adviser representative (you can visit his site to learn more about his financial planning services). He is also the author of various books on investing like All About Commodities, All About Short Selling and High-Profit IPO Strategies. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.