Chevron highlighted as dividend investment
The Motley Fool recommends the US-listed energy major for long-term income, citing a 3.9% forward yield and projected earnings growth, despite its exclusion from the firm’s top 10 stock picks.
The Motley Fool, via Yahoo Finance, has published an article titled "Best Dividend Stock to Buy Now and Hold Forever," recommending Chevron (NYSE: CVX) as a long-term income investment. The recommendation highlights Chevron’s status as an integrated energy giant with operations across upstream, midstream, and downstream sectors in 180 countries. Key financial metrics cited include a 39-year streak of annual dividend increases, a forward yield of 3.9%, and a corporate breakeven price for Brent crude of $50 per barrel.
Analysts project a 25% compound annual growth rate for Chevron’s earnings per share between 2025 and 2028. This growth is supported by production expansion in regions including Australia, Guyana, Kazakhstan, and the Gulf of Mexico. The company aims to increase annual oil and gas production by 2%-3% through 2030, leveraging its diversified portfolio to navigate volatile commodity markets.
The article notes that Chevron’s integrated model provides resilience against price swings. While rising oil prices benefit upstream exploration, they can pressure downstream refining. Chevron’s ownership of midstream pipeline infrastructure, which charges tolls for transport, offers a buffer against such volatility. The company’s corporate breakeven for Brent crude is $50 per barrel, with its upstream business breakeven at approximately $30 per barrel. Current Brent crude prices are reported at $83 per barrel.
Projected 2026 earnings per share are estimated at $14.11, which is expected to cover the forward annual dividend rate of $7.12. The Motley Fool article states that Chevron has consistently raised its dividend through four official US recessions and ongoing global conflicts. At $188 per share, the stock trades at 12 times this year's earnings, which the publication describes as a bargain relative to its cash generation capabilities.
Despite the positive analysis, the article notes that Chevron was not included in The Motley Fool’s Stock Advisor team’s current list of 10 best stocks to buy. The Motley Fool discloses that it holds positions in Chevron and has a disclosure policy regarding its recommendations. The publication contrasts Chevron’s steady income profile with the potential for higher returns from its top 10 picks, citing historical performance data for stocks like Netflix and Nvidia.
