TLDR
- Jim Cramer suggests keeping CVX, citing its 3.85% dividend yield and its consistency
- Quarterly EPS was $1.52, which was $0.08 higher than estimated, although revenue dropped 10.2% year-over-year
- Quarterly dividend was increased to $1.78 per share, annualizing to $7.12 (~3.8% yield)
- Multiple institutional investors upped their positions; institutional ownership is at 72.42%
- Insiders sold stocks worth $89.5M last quarter; the analyst consensus is “Hold” with a $176.36 price target
Chevron (CVX) is grabbing the attention of both Wall Street analysts and retail investors as the stock rose 1.3% to open at $186.47 on Friday — close to its 52-week high of $187.90.
Jim Cramer commented during a recent segment, stating to a caller that he would hold the stock. “I believe it can rise significantly,” Cramer said, highlighting the dividend yield and what he termed Chevron’s “consistency.”
He also pointed out a potential upside from Chevron’s ongoing operations in Venezuela, describing it as a “kicker” for the stock.
Dividend Gets a Bump
Recently increased its quarterly dividend from $1.71 to $1.78 per share. This amounts to an annualized $7.12 — a yield of approximately 3.8%. The dividend will be disbursed on March 10 to shareholders on record as of February 17.
The dividend payout ratio stands at 106.91%, meaning Chevron is paying out more in dividends than it’s currently earning — something to keep an eye on.
Earnings Miss on Revenue, Beat on EPS
In its latest quarterly report on January 30, Chevron reported EPS of $1.52, surpassing the $1.44 consensus estimate. Nevertheless, revenue stood at $45.79 billion, falling short of the $48.18 billion expectation and dipping 10.2% from the same quarter the previous year.
Net margin was 6.51% and return on equity was 7.89%. Analysts expect full-year EPS of $10.79.
That year-over-year EPS decline is hard to overlook — Chevron posted $2.06 EPS in the same quarter a year ago.
Institutions Are Adding
Numerous institutional investors boosted their CVX holdings in the third quarter. Trivium Point Advisory LLC raised its stake by 73.9%, acquiring 6,855 additional units to hold 16,131 valued at approximately $2.5 million.
American Century Companies was the biggest mover, adding 810,086 units — a 45.6% increase — bringing its total to 2,586,278 valued at around $401.6 million.
Berkshire Hathaway also increased its Chevron position following Warren Buffett’s departure from the firm’s leadership.
Total institutional ownership is now at 72.42%.
Insiders Heading for the Exits
While institutions are purchasing, insiders have been selling. During the past quarter, insiders disposed of 534,898 units valued at $89.5 million.
Vice Chairman Mark A. Nelson sold 45,800 units on February 2 at an average of $174.17, reducing his position by 86.48%. Insider Andrew Benjamin Walz sold 1,463 units on February 18 at $183.83.
Insiders currently own just 0.21% of the company.
What Analysts Are Saying
Analysts’ views are varied. UBS has a buy rating with a $212 price target. BMO Capital Markets reaffirmed an outperform rating with a $190 target. JPMorgan upgraded CVX from neutral to overweight with a $176 target.
On the other hand, a DCF-based valuation piece estimated CVX is overvalued by around 30%, putting intrinsic value closer to $126.
The consensus among 24 analysts is “Hold” with an average price target of $176.36 — below the current trading price of the stock.
CVX’s 50-day moving average is at $169.52 and its 200-day is at $159.57. The stock has a market cap of $372 billion, a PE ratio of 28, and a beta of 0.70.