Key Takeaways
- Jim Cramer advises maintaining CVX positions, highlighting its 3.85% dividend yield and operational reliability
- Company delivered quarterly EPS of $1.52, surpassing forecasts by $0.08, despite 10.2% revenue decline year-over-year
- Quarterly dividend increased to $1.78 per share, translating to $7.12 annually (~3.8% yield)
- Institutional stakeholders expanded holdings; institutional ownership reaches 72.42%
- Company insiders liquidated $89.5M in shares last quarter; Wall Street consensus remains “Hold” with $176.36 target price
Chevron (CVX) has captured significant market attention as shares advanced 1.3% to begin Friday’s session at $186.47 — approaching its 52-week peak of $187.90.
During a recent broadcast appearance, Jim Cramer addressed viewer questions about the energy giant, recommending investors maintain their positions. “I think it can go up a lot,” Cramer remarked, emphasizing the dividend yield alongside Chevron’s track record of “consistency.”
Cramer additionally noted that Chevron’s Venezuelan operations could serve as a “kicker” providing additional upside potential for shareholders.
Quarterly Dividend Sees Modest Increase
Chevron announced an increase to its quarterly dividend, elevating the payment from $1.71 to $1.78 per share. On an annualized basis, this represents $7.12 — translating to approximately 3.8% yield. The payment date is scheduled for March 10, with a record date of February 17.
Notably, the dividend payout ratio currently stands at 106.91%, indicating the company distributes more in dividends than current earnings support — a metric investors should monitor closely.
Mixed Earnings Results: Profit Beats, Revenue Misses
Chevron’s latest quarterly earnings report, released January 30, revealed EPS of $1.52, exceeding the analyst consensus of $1.44. Conversely, revenue totaled $45.79 billion, falling short of the $48.18 billion projection and representing a 10.2% decline compared to the prior year period.
The company reported a net margin of 6.51% with return on equity at 7.89%. Full-year EPS projections from analysts stand at $10.79.
The year-over-year earnings comparison reveals significant deterioration — the company delivered $2.06 EPS during the comparable quarter last year.
Institutional Investment Activity Intensifies
Numerous institutional investors expanded their CVX holdings during Q3. Trivium Point Advisory LLC increased its position by 73.9%, acquiring an additional 6,855 shares to reach 16,131 shares valued at approximately $2.5 million.
American Century Companies led institutional purchases, adding 810,086 shares — representing a 45.6% increase — elevating its total holdings to 2,586,278 shares worth roughly $401.6 million.
Berkshire Hathaway also increased its Chevron stake following Warren Buffett’s transition from leadership.
Institutional ownership currently comprises 72.42% of outstanding shares.
Insider Selling Activity Raises Questions
While institutional investors accumulate shares, company insiders have moved in the opposite direction. During the most recent quarter, insiders disposed of 534,898 shares totaling $89.5 million.
Vice Chairman Mark A. Nelson sold 45,800 shares on February 2 at an average price of $174.17, trimming his holdings by 86.48%. Additionally, insider Andrew Benjamin Walz sold 1,463 shares on February 18 at $183.83.
Company insiders collectively own merely 0.21% of outstanding shares.
Wall Street Perspective Remains Divided
Analyst recommendations present a varied picture. UBS maintains a buy rating with a $212 price objective. BMO Capital Markets continues its outperform rating with a $190 target. JPMorgan recently upgraded CVX from neutral to overweight, establishing a $176 target.
Conversely, one DCF-based analysis suggests CVX trades approximately 30% above fair value, placing intrinsic value around $126.
The aggregate consensus among 24 analysts stands at “Hold” with an average price target of $176.36 — notably below current trading levels.
CVX’s 50-day moving average registers at $169.52, while the 200-day moving average sits at $159.57. The stock commands a market capitalization of $372 billion, trades at a PE ratio of 28, and exhibits a beta of 0.70.
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