Understanding Chevron Corp's Dividend Payouts and Future Prospects
Chevron Corp (NYSE:CVX) recently announced a dividend of $1.51 per share, payable on 2023-12-11, with the ex-dividend date set for 2023-11-16. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Chevron Corp's dividend performance and assess its sustainability.
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Chevron is an integrated energy company with exploration, production, and refining operations worldwide. It is the second-largest oil company in the United States with production of 3.0 million of barrels of oil equivalent a day, including 7.7 million cubic feet a day of natural gas and 1.7 million of barrels of liquids a day. Production activities take place in North America, South America, Europe, Africa, Asia, and Australia. Its refineries are in the U.S. and Asia for total refining capacity of 1.8 million barrels of oil a day. Proven reserves at year-end 2022 stood at 11.2 billion barrels of oil equivalent, including 6.1 billion barrels of liquids and 30.9 trillion cubic feet of natural gas.
Chevron Corp's Dividend Analysis
A Glimpse at Chevron Corp's Dividend History
Chevron Corp has maintained a consistent dividend payment record since 1984. Dividends are currently distributed on a quarterly basis. Chevron Corp has increased its dividend each year since 1988. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 35 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Chevron Corp's Dividend Analysis
Breaking Down Chevron Corp's Dividend Yield and Growth
As of today, Chevron Corp currently has a 12-month trailing dividend yield of 4.09% and a 12-month forward dividend yield of 4.15%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Chevron Corp's annual dividend growth rate was 6.10%. Extended to a five-year horizon, this rate decreased to 5.80% per year. And over the past decade, Chevron Corp's annual dividends per share growth rate stands at 4.20%.
Based on Chevron Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Chevron Corp stock as of today is approximately 5.42%.
Chevron Corp's Dividend Analysis
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Chevron Corp's dividend payout ratio is 0.44.
Chevron Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Chevron Corp's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Chevron Corp's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Chevron Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Chevron Corp's revenue has increased by approximately 18.10% per year on average, a rate that outperforms approximately 64.29% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Chevron Corp's earnings increased by approximately 128.10% per year on average, a rate that outperforms approximately 93.71% of global competitors.
Concluding Thoughts on Chevron Corp's Dividend Outlook
Investors seeking stable and growing income streams can find solace in Chevron Corp's impressive dividend track record and its commitment to shareholder returns. With a solid payout ratio, strong profitability, and robust growth metrics, Chevron Corp appears well-positioned to continue its history of dividend growth. The company's strategic focus on operational efficiency and portfolio optimization further bolsters confidence in its ability to sustain and potentially increase its dividends in the foreseeable future. As value investors contemplate their next move, Chevron Corp's dividend prospects shine as a beacon of reliability in a volatile market landscape.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
