In Focus – CVX

Chevron has one of the highest dividend yields of any firm we cover, and it is one of one of the highest paying dividend stocks available. However, its overall fundamentals are poor. And we would not consider it one of the best stocks to buy now.

Background

Chevron (CVX) is the world’s fourth largest oil firm based on proven reserves. Chevron is in both the upstream segment (i.e. exploration and production) and the downstream segment (i.e. refining, marketing, and transportation).

Specifically, its upstream segment includes exploring for, developing, and producing crude oil and natural gas products; processing, liquefaction, transportation and regasification of liquefied natural gas (LNG); transporting crude oil through pipelines; transporting, storing, and marketing natural gas.

The company’s downstream operations include refining crude oil into petroleum products; marketing crude oil and refined products; transporting crude oil and refined products by pipeline, ocean vessel, truck, and railway; and manufacturing and marketing commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives.

Stock Fundamentals

We are not high on the oil & gas industry in general, and Chevron is no exception. Chevron’s growth prospects look as bleak (if not worse) than the market in general. Chevron has said that it will cut its capital spending this year to $ 26.6 billion. This is just one more sign that there is still no light at the end of the tunnel.

Cheveron’s finances are not weak, but they are not particularly strong either. And particularly strong finances are something we like to see if we feel a firm may be facing a difficult road ahead. On top of all this, CVX is not bargain-priced as it probably should be given the weaknesses in the stock.

We would not consider CVX one of the best stocks to buy now. But we hold out hope that it eventually will be again in the very long run.

Stat Sheet – Chevron Corporation 4/22/16

Ticker CVX
Industry  Oil & Gas Integrated
Price $ 102.01
Market Cap  $ 190,600
Dividend Yield 4.20
Dividend/CFOp 0.374
Equity/Assets 0.577
Average Equity/Assets 0.572
Financial Strength Average
Growth Prospects Below Average
Beta 1.11
Price Volatility Below Average
Stock Fundamentals D

(Our assessment of this firm’s fundamentals will be in effect for the rest of calendar year 2016)

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Disclaimer – Information contained herein has been obtained from sources believed to be reliable. Neither the author nor the publisher guarantees the accuracy or completeness of the information and methods described. This information is offered as general commentary only. It is not intended as investment advice. Investment and trading of securities involves risk, including of loss of capital. Market conditions change over time, and no assurance can be given that a reader may apply the principles described to make a profit. The author and publisher expressly disclaim all and any liability to any person for any investment or trading decisions that the reader may make in reliance on this information.

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In Focus – CVX

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