Chevron (NYSE: CVX) is like ExxonMobil (NYSE: XOM) in that it is a “Big Oil” company that has not spun off units like so many others.
As a result, Chevron, again like ExxonMobil, has not fallen in recent stock market action like so many other energy companies.
Chevron is down for the last week, month, quarter, six months, and year of market action. For 2014, Chevron is off by 11.45 percent (chart below). But it has not dropped nearly as much as other oil companies such as ConocoPhillips (NYSE: COP), which has plunged nearly 20 percent for the last six months.
This is what makes Chevron such an appealing long term investment, like ExxonMobil.
Chevron, based in California, has operations around the world. It has a market capitalization of just over $200 billion. Due to its size, Chevron will not be delivering tremendous growth. But it provides steady, reliable returns that are ideal for the holdings of a long term investor.
In that way, Chevron is like ExxonMobil.
Earnings per share are projected to rise by 5.32 percent over the next five years for Chevron. That is a positive trend from growth this year; and the past five years. Chevron is selling at a discount, based on a price-to-sales ratio.
There are other indicators that are bullish for the future.
Chevron has a solid balance sheet and robust earnings statement. What enhances both is that Chevron has very little debt. That allows the company to finance growth and reward its shareholders with an above average dividend yield.
At present, the dividend yield for Chevron is just over 4 percent.
That is much higher than the dividend yield for ExxonMobil. Income investors should also appreciate that Chevron’s dividend is about twice as high as the average company in the Standard & Poor’s 500 Index (NYSE: SPY). As a “Dividend Aristocrat,” Chevron has a history of dividend growth. To earn the title of Dividend Aristocrat, a company must have increased the amount of its dividend annually for at least the past 25 years.
For long term investors, Chevron has the big appeal of Big Oil like ExxonMobil for its potential to deliver big total returns!