Chevron (NYSE:CVX)

Founded in 1879, Chevron Corporation is the 2nd largest oil company in the United States behind ExxonMobil, and the 4th in the world behind BP and Shell. Based in California, it is present in more than 180 countries and operates in every aspect of the oil and gas industry: exploration and production; refining, sales and transportation; chemical manufacturing and sales; and power generation. In 2001, Chevron merged with Texaco to form ChevronTexaco. On May 9, 2005, ChevronTexaco announced that it was dropping the name Texaco and reverting to Chevron Corporation. It has been a component of the Dow Jones Industrial Average since February 19, 2008. (source Wikipedia)

Chevron is currently being generous with its shareholders by offering them a yield of 3.7%. Despite the significant increase in the share price concomitant with the surge in oil prices, the valuation from a dividend point of view remains attractive. It is also attractive from a profit point of view since the P/E ratio is only 11.10%Despite this generosity, the company manages to maintain a very low payout ratio, at 30.38%, which leaves it with plenty of room to increase its dividend further in the future, even in the event of a difficult passage.

It should be noted, however, that this very low ratio is due to a fairly low dividend growth in the medium term (7.65%) combined with a strong increase in earnings per share over the past year. Despite this weak growth in distributions, Chevron has still increased its dividend for twenty consecutive years, which is appreciable.

The title also offers a low volatility in CHF (11.64%) which it owes in particular to the good resistance of the raw materials sector in the face of the fall of the dollar. This was also one of the reasons which had pushed us to follow this value.

Chevron's performance since the 1980s has been similar to that of the S&P 500, thanks to the surge in oil prices in recent years. This relatively weak performance has nevertheless allowed the stock to maintain attractive valuations, despite the recent significant increase in its share price. The price-to-earnings ratio was thus much higher during the 1990s.

Chevron is therefore trading at an attractive price and offers a good hedge against fluctuations in the greenback. It is ideal for an investor looking for a immediate attractive yield, as an annuitant, while benefiting from distribution growth that easily covers them against inflation risks. From our longer-term perspective, however, we consider the stock as a position to hold if already in the portfolio, but not currently as a buying opportunity.