Stock of the Day

May 16, 2023

Chevron (CVX)

$156.92
-$1.87 (-1.2%)
Market Cap: $285.36B

About Chevron

Chevron Corporation, through its subsidiaries, engages in the integrated energy and chemicals operations in the United States and internationally. The company operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, production, and transportation of crude oil and natural gas; processing, liquefaction, transportation, and regasification of liquefied natural gas; transportation of crude oil through pipelines; transportation, storage, and marketing of natural gas; and carbon capture and storage, as well as a gas-to-liquids plant. The Downstream segment refines crude oil into petroleum products; markets crude oil, refined products, and lubricants; manufactures and markets renewable fuels, commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives; and transports crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car. The company was formerly known as ChevronTexaco Corporation and changed its name to Chevron Corporation in 2005. Chevron Corporation was founded in 1879 and is headquartered in San Ramon, California.

Chevron Bull Case

Here are some ways that investors could benefit from investing in Chevron:

  • Chevron recently increased its quarterly dividend from $1.63 to $1.71 per share, reflecting a commitment to returning value to shareholders. This represents an annualized dividend of $6.84, providing a yield of 4.33%, which is attractive for income-focused investors.
  • The company's stock is currently trading at $158.10, which is near its 52-week high of $167.11, indicating strong market performance and investor confidence.
  • Chevron has a solid market capitalization of $283.75 billion, showcasing its stability and position as a leading player in the oil and gas industry.
  • With a low debt-to-equity ratio of 0.13, Chevron demonstrates strong financial health, suggesting that it is less reliant on debt for financing, which can be a safer investment during economic downturns.
  • Analysts have a consensus rating of "Moderate Buy" for Chevron, with a target price averaging around $174.13, indicating potential for price appreciation in the near term.

Chevron Bear Case

Investors should be bearish about investing in Chevron for these reasons:

  • Chevron reported earnings per share (EPS) of $2.06 for the last quarter, which was below analysts' expectations of $2.42, indicating potential challenges in meeting growth targets.
  • The company's net margin of 8.71% is relatively modest, which may raise concerns about profitability compared to competitors in the industry.
  • Insider selling activity has been noted, with a vice president selling 9,325 shares, which could signal a lack of confidence in the company's short-term performance.
  • Chevron's quick ratio of 0.80 suggests that the company may face challenges in meeting its short-term liabilities, which could be a red flag for investors concerned about liquidity.
  • Recent analyst downgrades, such as Barclays reducing their price target from $174.00 to $171.00, may indicate a cautious outlook on the stock's future performance.

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