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2023-12-16
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CVX
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New throughout, adds sale results, statements from oil industry and environmental group
Dec 20 (Reuters) - A Biden administration auction of Gulf of Mexico drilling rights raised $382 million on Wednesday as oil companies claimed offshore acreage for what is set to be the last time until 2025.
The auction total was the highest of any federal offshore oil and gas lease sale since 2015, according to a Reuters tally.
Shell SHEL.L, Hess HES.N, Anadarko, BP BP.L, Chevron CVX.N, Repsol REP.MC and Equinor EQNR.OL were among the 26 companies that participated in the sale.
Anadarko had the auction's highest bid of more than $25 million for a block in the deepwater Mississippi Canyon area, according to an online broadcast of the sale by the U.S. Bureau of Ocean Energy Management (BOEM).
The sale will likely be the last opportunity for oil and gas companies to bid on Gulf of Mexico acreage until 2025, according to the administration's five year schedule, which includes a historically low number of planned lease auctions.
An oil and gas industry group said the sale results underscored the Gulf of Mexico's role as an economic engine and called on Congress to require more leasing.
"The U.S. offshore oil and gas industry is stepping up and making the investments vital to enhance our energy, economic, and national security for decades to come," National Ocean Industries Association President Erik Milito said in a statement.
The sale of more than 72.7 million acres on the Outer Continental Shelf included 6 million acres that Interior Department officials had tried to withdraw months ago to protect the habitat of the Rice's whale.
A federal judge ordered that the sale be expanded after oil and gas companies sued.
An environmental group said the oil industry was prioritizing profits over the environment.
"Perpetual leasing, new fossil fuel export projects and oil spills are creating a hellish situation for marine life and Gulf communities," Center for Biological Diversity's oceans legal director, Kristen Monsell, said in a statement.
About 2.4% of the acreage offered received bids, according to a document of pre-sale statistics posted on BOEM's web site. More than three-quarters of the tracts that received bids were in water more than 800 meters (2,625 feet) deep.
BOEM will release additional auction statistics later on Wednesday.
President Joe Biden has sought to limit new oil and gas leasing as part of his climate change agenda, but a new federal law made offshore wind leasing contingent on offering oil and gas drilling rights.
The Biden administration sees offshore wind development as important to decarbonizing the U.S. power sector.
The sale comes days after the United States and nearly 200 other nations agreed to begin reducing consumption of fossil fuels to avert the worst impacts of climate change.
(Reporting by Nichola Groom; Editing by Nick Zieminski and David Gregorio)
((nichola.groom@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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It was a week when oil prices snapped their losing streak while natural gas futures continued the southward journey.
The headlines revolved around Canadian energy infrastructure provider Pembina Pipeline’s PBA acquisition of certain joint venture interests from Enbridge and offshore driller Transocean’s RIG contract award. Developments associated with Equinor EQNR, Chevron CVX and Canadian Natural Resources CNQ also grabbed attention.
Overall, it was a mixed seven-day period for the sector. West Texas Intermediate (WTI) crude futures edged up around 0.3% to close at $71.43 per barrel, but natural gas prices moved down 3.5% to end at $2.49 per million British thermal units (MMBtu).
The crude price action turned marginally positive after seven consecutive weeks of declines. This turnaround could be attributed to the Energy Information Administration report showing a significantly larger-than-expected decline in domestic oil inventories. Also boosting commodity prices, the Fed indicated that it would cut interest rates in 2024.
Meanwhile, natural gas slumped to a six-month low, overwhelmed by high production and insipid weather-related demand.
Recap of the Week’s Most Important Stories
1. Pembina Pipeline, a leading Canadian midstream company, announced that it would purchase fellow operator Enbridge’s remaining interests in the Alliance Pipeline, Aux Sable pipelines and NRGreen joint ventures for C$3.1 billion.
This deal will see Pembina take full ownership of its critical assets, strengthening its position as a leader in transporting natural gas across North America. This strategic move is also expected to significantly boost Pembina’s growth and profitability in the years to come.
The Alliance Pipeline is a critical natural gas transportation system that operates across Canada and the United States. Spanning approximately 3,888 kilometers (2,414 miles), it carries natural gas from western Canada to the Chicago market. The Aux Sable processing plant, located in Illinois, is strategically connected to the Alliance Pipeline and is responsible for processing natural gas liquids (NGL) from the pipeline. (Pembina to Buy Enbridge’s Assets in a C$3.1-Billion Deal)
2. Transocean, an international provider of offshore contract drilling services for oil and gas wells, announced a significant contract for its Transocean Barents rig in the Romanian Black Sea. The contract is expected to contribute approximately $251 million to Transocean’s backlog, excluding full compensation for mobilization and a demobilization fee.
The Zacks Rank #3 (Hold) company revealed that it has inked a minimum 540-day contract with OMV Petrom S.A. at a daily rate of $465,000, excluding additional services. The program is slated to commence in the first quarter of 2025, marking a strategic move for Transocean into the challenging environmental conditions of the Romanian Black Sea.
You can see the complete list of today’s Zacks #1 Rank stocks here.
According to Transocean, the day rate for the contract includes provisions for additional services. Moreover, for each day beyond the initial 540 days, including two option periods, the operating day rate will increase to $480,000. This provides RIG with the potential for additional revenues if the contract extends beyond the originally stipulated duration. (Transocean Signs a $251M Contract for Barents Rig)
3. Equinor reached an agreement to acquire energy biggie Shell’s share at the Linnorm gas discovery in the Norwegian Sea. Per the deal, Equinor is set to obtain a 30% stake in the PL 255 license, which encompasses the Linnorm gas discovery. The agreement depends on the Stavanger, Norway-headquartered integrated major’s becoming the operator instead of Shell. The deal is scheduled to be completed in the first quarter of 2024.
The Linnorm discovery is the biggest untapped gas find on the Norwegian Continental Shelf, with an estimated 25-30 billion cubic meters of recoverable gas resources. This surpasses the remaining gas reserves in each of the active fields Aasta Hansteen, Martin Linge and Gina Krog.
With the acquisition, Equinor aims to strengthen its presence in the Halten area, aligning with its strategy to enhance its portfolio on the Norwegian Continental Shelf. Equinor currently operates productive hubs in this region and continues to identify appealing opportunities for further development. (Equinor Signs Deal to Acquire Shell's Linnorm Gas Stake)
4. U.S. supermajor Chevron is making significant cutbacks in its oil-refinery investments in California, citing what it deems as "adversarial" policies toward fossil fuels in the state. The San Francisco Bay area-based oil giant has cut spending in California by "hundreds of millions of dollars since 2022," according to comments submitted to the California Energy Commission.
Chevron, a major supplier of jet fuel to airports in San Francisco and Los Angeles, says it's doing this because of the tough business environment and not making enough profit due to California's strict fuel standards and carbon cap-and-trade program.
Chevron's decision to cut spending comes amid California lawmakers' considerations to limit profits for refiners within the state. This move could affect the already high prices at gas pumps in California. Governor Gavin Newsom has ambitious environmental goals, aiming for an 85% reduction in climate-damaging emissions by 2045. (Chevron at Odds With California Goals, Cuts Investment).
5. Canadian Natural Resources, a leading North American energy producer, revealed its 2024 budget, allocating C$5.4 billion to fuel its growth ambitions. This disciplined plan prioritizes both near-term production increase and long-term capacity expansion, marking a strategic move in the face of a fluctuating energy landscape. It's packed with insights into CNQ's business strategy for the coming year.
As far as production is concerned, the company’s targeted 2024 exit rate of 1,455 thousand barrels of oil equivalent per day (MBOE/d) represents an increase of 40 MBOE/d over the expected 2023-end production, showcasing CNQ's commitment to boosting output.
The company's projections also extend to specific sectors, with thermal and oil sands mining expected to reach 724,000-743,000 barrels per day (bpd) in 2024. This contrasts with the prior-year guidance of 705,000-729,000 bpd. Notably, the addition of four new pads contributes to this optimistic outlook. (Canadian Natural Unveils Ambitious Growth Plan for 2024).
Price Performance
The following table shows the price movement of some major oil and gas players over the past week and during the last six months.
Company Last Week Last 6 Months
XOM +1.4% -3.3%
CVX +3.5% -4.8%
COP +2.2% +9.5%
OXY +3.7% +1.4%
SLB +6.9% +9.4%
RIG +4.4% -1.6%
VLO +4.7% +15.5%
MPC +3.7% +34%
With oil moving up for the week, stocks were mostly positive. The Energy Select Sector SPDR — a popular way to track energy companies — rose 2.5% last week. Over the past six months, the sector tracker has increased 4.1%.
What’s Next in the Energy World?
As usual, market participants will closely track the regular releases to look for guidance on the direction of the commodities. In this context, the U.S. Government’s statistics on oil and natural gas — one of the few solid indicators that come out regularly — will be on energy traders' radar. Data on rig count from the oilfield service firm Baker Hughes, which is a pointer to the trends in U.S. crude/natural gas production, is closely followed, too.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Chevron Corporation (CVX) : Free Stock Analysis Report
Transocean Ltd. (RIG) : Free Stock Analysis Report
Canadian Natural Resources Limited (CNQ) : Free Stock Analysis Report
Pembina Pipeline Corp. (PBA) : Free Stock Analysis Report
Equinor ASA (EQNR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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Wall Street closed sharply higher on Tuesday, led by energy and tech stocks. Markets continued to rally on rate-cut expectations despite yet another Fed official turning hawkish. Energy prices hit a two-week high over concerns in the Red Sea region. All of the three major stock indexes ended in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) added 251.9 points, or 0.7%, to close at 37,557.92. Twenty-four components of the 30-stock index ended in positive territory, while six ended in negative.
The tech-heavy Nasdaq Composite gained 0.7%, or 98.03 points, to close at 15,003.22.
The S&P 500 rose 0.6%, or 27.81 points, to close at 4,768.37. All of the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Communication Services Select Sector SPDR (XLC) and the Materials Select Sector SPDR (XLB) advanced 1.2%, 1% and 0.9%, respectively.
The fear-gauge CBOE Volatility Index (VIX) decreased 0.2% to 12.53. A total of 11.6 billion shares were traded on Tuesday, lower than the last 20-session average of 12 billion. Advancers outnumbered decliners on the NYSE by a 4.68-to-1 ratio. On the Nasdaq, advancing issues led to declining ones by 2.85-to-1.
Investors Remain Upbeat Despite Another Fed Official Turning Hawkish
Over the past few weeks, Wall Street has continued to ride on the rate cut rally. Market participants have remained hopeful that there will be multiple rate cuts in 2024. In fact, per CME’s FedWatch tool, currently, there is a 67.5% possibility that the central bank will announce a 25 bps rate cut in March of next year.
Fed officials, however, in recent sessions, have started to balance things out a bit by turning a bit hawkish. More and more important Fed officials are coming out and saying that the markets might have gotten ahead of themselves and may have read too much into Fed Chair Jerome Powell’s post-FOMC speech. Also, per the Fed December meeting, there are only three rate cuts planned in 2024, while investors are anticipating at least five or six.
Atlanta Fed president Raphael Bostic joined this set of cautious Fed officials on Tuesday, stating that there is no current urgency for the apex bank to reduce interest rates in the United States given the strength of the economy and that inflation needs to return to the central bank's stated target of 2%. Bostic expects 25 bps rate cuts in the second half of the year but emphasized that inflation remains too high for that to happen.
“Inflation is going to come down relatively slowly in the next six months, which means that there's not going to be urgency for us to start to pull off of our restrictive stance," Bostic said in a program at the Harvard Business School Club of Atlanta. However, just like the previous sessions, the market has continued to disregard these comments and has boomed.
Energy Sector Drives the Market on Red Sea Concerns
Oil prices shot up for a second session in a row this week, rising more than a dollar a barrel on Tuesday. Yemen's Houthi militants attacked ships in the Red Sea, disrupting maritime trade and pushing up energy prices. Brent crude rose $1.28, or 1.6%, to settle at $79.23/barrel. WTI crude rose 97 cents, or 1.3%, to settle at $73.44/barrel, the highest in over two weeks.
Consequently, shares of Exxon Mobil Corporation XOM and Chevron Corporation CVX jumped 1.3% each, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported that building permits for November had come in at a seasonally adjusted annual rate of 1,460,000. The number for October had been revised up to 1,498,000 from the previously reported 1,487,000.
Housing starts for November increased to a seasonally adjusted annual rate of 1,560,000. The number for October was revised down to 1,359,000 from the previously reported 1,372,000.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Chevron Corporation (CVX) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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In early trading on Wednesday, shares of Chevron topped the list of the day's best performing Dow Jones Industrial Average components, trading up 0.5%. Year to date, Chevron has lost about 15.1% of its value.
And the worst performing Dow component thus far on the day is Salesforce, trading down 0.7%. Salesforce is showing a gain of 98.0% looking at the year to date performance.
Two other components making moves today are International Business Machines, trading down 0.6%, and Walt Disney, trading up 0.2% on the day.
VIDEO: Dow Movers: CRM, CVX
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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The Dogs of the Dow is a long standing wall street strategy for investing in the stock market that involves purchasing the 10 highest yielding Dow Jones Industrial Average ($DOWI) (DIA) stocks. The DJIA is a stock market index that consists of 30 large publicly traded companies listed on the New York Stock Exchange and the NASDAQ 100 Index ($IUXX) (QQQ).
The Dogs of the Dow strategy is based on the idea that the high dividend yield of these stocks indicates that they may be undervalued by the market and are likely to outperform in the future. The strategy involves rebalancing the portfolio at the end of each year to ensure that it still includes the 10 highest yielding DJIA stocks.
The Dogs of the Dow strategy has been popular with investors as a way to potentially generate income and outperform the market. However, like all investment strategies, it carries risks and may not always be successful.
So, what are the 10 highest yielding stocks in the Dow right now? We can use the Stock Screener to find all the Dow stocks and include a column for Annual dividend yield.
Then for the results, we select Filter View and sort by Dividend Yield.
So our 10 Dogs of the Dow for 2023 are:
Walgreens (WBA)
Verizon (WBA)
3M Company (MMM)
Dow (DOW)
International Business Machines (IBM)
Chevron (CVX)
Coca-Cola Company (KO)
Amgen (AMGN)
Cisco (CSCO)
Johnson & Johnson (JNJ)
As shown in the above table, there are some very healthy dividend yields on offer. One way to further enhance this yield is by selling covered calls.
Some people like to sell monthly covered calls, but that can require ongoing maintenance and monitoring. Today, we’re going to look at a yearly covered call for those that like a more set and forget approach.
Walgreens Yearly Covered Call Example
Let’s use the first stock on the list, Walgreens, and look at an example.
Buying 100 shares of WBA would cost around $2,600. The January 17, 2025, call option with a strike price of $27.50 was trading yesterday for around $3.65, generating $365 in premium per contract for covered call sellers.
Selling the call option generates an income of 16.31% in 394 days, equalling around 15.07% annualized.
That assumes the stock stays exactly where it is. What if the stock rises above the strike price of $27.50?
If WBA closes above $27.50 on the expiration date, the shares will be called away at $27.50, leaving the trader with a total profit of $512 (gain on the shares plus the $365 option premium received). That equates to a 22.88% return, which is 21.14% on an annualized basis.
That doesn’t include dividends. WBA is estimate to pay around $1.92 in dividends over the next 12 months which would increase the income potential by 7.69% per annum.
Let’s look at another example using Intel.
Verizon Yearly Covered Call Example
Buying 100 shares of VZ would cost around $3,750. The January 17, 2025, call option with a strike price of $38 was trading yesterday for around $2.65, generating $265 in premium per contract for covered call sellers.
Selling the call option generates an income of 7.60% in 394 days, equalling around 7.03% annualized.
That assumes the stock stays exactly where it is. What if the stock rises above the strike price of $38?
If VZ closes above $38 on the expiration date, the shares will be called away at $38, leaving the trader with a total profit of $315 (gain on the shares plus the $265 option premium received). That equates to a 9.04% return, which is 8.35% on an annualized basis.
That doesn’t include dividends. VZ is estimate to pay around $2.62 in dividends over the next 12 months which would increase the income potential by 6.96% per annum.
Selling covered calls in 2024 on the Dogs of the Dow stocks, could be a great strategy for generating income and building long term wealth.
Please remember that options are risky, and investors can lose 100% of their investment. This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.
More Stock Market News from Barchart
Stocks Settle Higher on Dovish Fed Official Comment
Will Broadcom Stock Hit $1,200 Per Share Next Year?
Analysts Call This FAANG Stock a Top Pick for 2024
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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Below is Validea's guru fundamental report for CHEVRON CORPORATION (CVX). Of the 22 guru strategies we follow, CVX rates highest using our Price/Sales Investor model based on the published strategy of Kenneth Fisher. This value strategy rewards stocks with low P/S ratios, long-term profit growth, strong free cash flow and consistent profit margins.
CHEVRON CORPORATION (CVX) is a large-cap value stock in the Oil & Gas Operations industry. The rating using this strategy is 90% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
PRICE/SALES RATIO: PASS
TOTAL DEBT/EQUITY RATIO: PASS
PRICE/RESEARCH RATIO: PASS
PRICE/SALES RATIO: FAIL
LONG-TERM EPS GROWTH RATE: PASS
FREE CASH PER SHARE: PASS
THREE YEAR AVERAGE NET PROFIT MARGIN: PASS
Detailed Analysis of CHEVRON CORPORATION
CVX Guru Analysis
CVX Fundamental Analysis
More Information on Kenneth Fisher
Kenneth Fisher Portfolio
About Kenneth Fisher: The son of Philip Fisher, who is considered the "Father of Growth Investing", Kenneth Fisher is a money manager, bestselling author, and longtime Forbes columnist. The younger Fisher wowed Wall Street in the mid-1980s when his book Super Stocks first popularized the idea of using the price/sales ratio (PSR) as a means of identifying attractive stocks. According to his alma mater, Humboldt State University, Fisher is also one of the world's foremost experts on 19th century logging. Appropriately, Fisher's firm, Fisher Investments, is located in a lush forest preserve in Woodside, California, where the contrarian-minded Fisher says he and his employees can get away from Wall Street groupthink.
Additional Research Links
Top Energy Stocks
Dividend Aristocrats2023
Wide Moat Stocks2023
Cheapest Value Stocks2023
Factor-Based Stock Portfolios
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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The Dogs of the Dow in 2023 are up an average of just 2.8%, lagging the market by the widest amount since 2006, per Bespoke Investment Group, as quoted on Investors Business Daily. But more importantly, the Dogs of the Dow trailed the market in four of the past five years, Bespoke found.
Investors should note that the Dogs of the Dow represents the 10 highest-yielding blue-chip companies of the Dow Jones Industrial Average, picked after the stock market closes on the last day of the year. The stocks that form the Dogs of the Dow are likely to change every year because the relative dividend yields keep changing, thanks to the components’ regular dividend hikes and the changes in stock prices.
So, the outperformers often leave the Dogs list, allowing stocks that are in the oversold territory and that have seen their yields rising. Dividend stocks essentially erased their strong 2022 returns this year as 2023 can be defined as the year of strong Wall Street gains.Invesco Dow Jones Industrial Average Dividend ETF DJD is up 4.5% this year versus 24.2% gains in the S&P 500.
Investors now may try to foresee what lies ahead of Dogs of Dow in 2024. This is especially true given the Dow Jones hit a record high lately. The blue-chip index is in strong momentum just ahead of the Santa Claus rally.
Can Dogs of the Dow ETF Strategy Outperform in 2024?
The strength of the Dow Dogs weakened in 2023 as rates remained high. Apart from the Federal Reserve's rate hikes, increasing inflationary pressures caused a rise in Treasury bond yields, casting a pall over the Dogs. But with the Fed expected to cut rates 75 bps in 2024, dividend stocks have chances for a solid comeback.
Dividend Dogs of The Dow
You can invest in individual stocks with high dividends for potential gains. As of now, analysts highly recommend Chevron CVX for the upcoming year. This energy company offers a 4.04% yield, significantly exceeding the S&P 500's average. Based on short-term price targets offered by 17 analysts, the average price target for Chevron comes to $182.88. This equates to a 22.18% upside potential for the stock.
Then comes Verizon Communications VZ. Based on short-term price targets offered by 17 analysts, the average price target for Verizon Communications comes to $41.26, resulting in 9.53% upside potential. Verizon yields 7.06% annually.
Dow DOW yields 5.16% annually. Based on short-term price targets offered by 13 analysts, the average price target for Dow Inc. comes to $56.15, resulting in 6.50% upside potential.
3M MMM yields 5.67% annually. Based on short-term price targets offered by 12 analysts, the average price target for 3M comes to $109.75, marking a 3.7% upside potential.
Coca-Cola KO yields 3.12% annually. Based on short-term price targets offered by 15 analysts, the average price target for Coca-Cola comes to $65.33, marking a 1069% upside to average price target.
The Goldman Sachs Group GS yields 2.92% annually. Based on short-term price targets offered by 18 analysts, the average price target for Goldman Sachs comes to $393.44. This translates into a 4.53% upside to the average price target.
Amgen AMGN yields 3.09% annually. Based on short-term price targets offered by 18 analysts, Amgen stock has an upside potential of 2.08% to average price target.
Although Walgreens Boots Alliance WBA has a Zacks Rank #4 (Sell), the stock yields 7.69% annually. Based on short-term price targets offered by 13 analysts, the average price target for Walgreens Boots Alliance comes to $28.31. Upside to average price target is 13.33%, though risk is high.
Then again, Cisco Systems CSCO has a Zacks Rank #4 and a yield of 3.11%. Upside to average price target offered by 15 analysts is 10.53% (read: Dow Jones ETFs at Record High: More Rally Expected in 2024?).
ETFs in Focus
Apart from DJD, investors can keep a tab on ALPS Sector Dividend Dogs ETF SDOG and SPDR Portfolio S&P 500 High Dividend ETF SPYD. While DJD yields 4.37%, SPYD and SDOG yield 4.72% and 4.14% annually.
Any Caution?
Apart from rising rate concerns, several factors should now be kept in mind to bet on dividend dogs. The attractive dividend yield does not necessarily suggest these companies’ financial strength. They could be in the bottom of the business cycle. Also, the high yield can be the result of lower stock prices. An analyst also pointed out that the "Dogs of the Dow" strategy does not consider share buybacks, “which are functionally equivalent.”
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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
CocaCola Company (The) (KO) : Free Stock Analysis Report
Verizon Communications Inc. (VZ) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
3M Company (MMM) : Free Stock Analysis Report
Dow Inc. (DOW) : Free Stock Analysis Report
Walgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis Report
Invesco Dow Jones Industrial Average Dividend ETF (DJD): ETF Research Reports
SPDR Portfolio S&P 500 High Dividend ETF (SPYD): ETF Research Reports
ALPS Sector Dividend Dogs ETF (SDOG): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Pacer US Cash Cows 100 ETF (COWZ) is a passively managed exchange traded fund launched on 12/16/2016.
The fund is sponsored by Pacer Etfs. It has amassed assets over $18.10 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.49%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.95%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Energy sector--about 35.50% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Chevron Corp New (CVX) accounts for about 2.67% of total assets, followed by Marathon Pete Corp (MPC) and Valero Energy Corp (VLO).
The top 10 holdings account for about 22.31% of total assets under management.
Performance and Risk
COWZ seeks to match the performance of the Pacer US Cash Cows 100 Index before fees and expenses. The Pacer US Cash Cows 100 Index uses an objective, rules-based methodology to provide exposure to large and mid-capitalization U.S. companies with high free cash flow yields.
The ETF has added about 15.10% so far this year and was up about 16.34% in the last one year (as of 12/20/2023). In the past 52-week period, it has traded between $44.32 and $52.53.
The ETF has a beta of 1.07 and standard deviation of 19.33% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Cash Cows 100 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, COWZ is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $55.25 billion in assets, Vanguard Value ETF has $105.72 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Pacer US Cash Cows 100 ETF (COWZ): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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No stock can stave off the bearish whims of the market and rise constantly. Experienced investors are more than familiar with this fact and will often take advantage of the dips in quality stocks, picking up shares at a discount.
While the S&P 500 has roared 23% higher since the start of the year, there are some compelling stocks that haven't enjoyed similar performances. Bearing this in mind, two Fool.com contributors believe that patient investors on the prowl for solid stocks will be well served to consider oil supermajor Chevron (NYSE: CVX) and building automation specialist Johnson Controls (NYSE: JCI) right now despite their respective year-to-date declines of 17% and 18%.
A drop in energy prices provides a great opportunity to pick up Chevron
Scott Levine (Chevron): Despite a wave of market enthusiasm this year that has pushed a variety of stocks higher, Chevron has moved in the opposite direction. But it's not that all that surprising really. Because there's a close correlation between the movements of energy stocks and the price of energy, it's logical that a company that operates through the energy value chain like Chevron would also tumble since oil benchmarks West Texas Intermediate and Brent crude have fallen 11.5% and 8.5%, respectively, since the start of the year.
But this recent volatility belies the longer-term trend of Chevron's stock. Expanding their view to the recent 10-year period, for example, investors will find that while oil benchmarks have fallen, shares of Chevron have risen. Clearly, over the long term, clearer heads prevail, suggesting that investors who buy now and plan on holding for multiple years stand to prosper.
CVX data by YCharts.
A titan in the energy industry, Chevron has long been an attractive option, but its planned acquisition of Hess makes it even more appealing. After the transaction closes (presumably in the first half of 2024), Chevron will have a more robust upstream portfolio thanks to Hess' assets in Guyana, the Bakken, and the Gulf of Mexico. Management states that the acquisition will result in Chevron benefiting from $1 billion in annual synergies as well as generating "longer-term free cash flow growth." In fact, Chevron expects to hike its quarterly dividend 8% in January, thanks to the projected long-term free-cash-flow growth potential the Hess acquisition offers.
With the recent sell-off, shares of Chevron are attractively priced. Valued at 11.1 times trailing earnings, Chevron's stock is priced at a discount to its five-year average earnings multiple of 21.4. For investors who favor the cash-flow multiple, shares still seem like a bargain, valued at 7.9 times operating cash flow -- a discount to their five-year average cash-flow multiple of 9.4.
Johnson Controls can climb a wall of worry
Lee Samaha (Johnson Controls): Heating, ventilation, and air conditioning (HVAC), building controls, and fire and security products company Johnson Controls has work to do to rebuild confidence with investors. After disappointing investors in August with its fiscal third-quarter earnings report, management did the same again in the recent, delayed, fourth-quarter earnings report.
The results were delayed due to assessing the impact of a cyber attack on its operations, and there was an impact. Still, it wasn't enough to completely explain the revenue and earnings miss in the quarter. For example, management had guided toward adjusted earnings per share (EPS) of $1.10 in the fourth quarter only to deliver $1.05 with a $0.04 negative impact from the cyber attack. In addition, management's adjusted EPS guidance of $3.65 to $3.80 for fiscal 2024 was weaker than Wall Street analysts' consensus expectation of $3.96.
But here's the thing. It's not that Johnson Controls' growth isn't strong, it's more that it isn't quite as strong as management and the market had previously thought. For example, the midpoint of the 2024 earnings guidance puts the stock at 14 times earnings and around 16.5 times free cash flow (FCF).
Those are attractive multiples of a company growing revenue in the mid-single-digit range. In addition, the company's install orders grew by 9% in the quarter, taking the install backlog up 8% year over year. It's a key metric to follow because building solution equipment installations tend to lead to building solution services and global product sales.
That's positive news, but the company will still have to overcome the negative impact of the cyber attack in the first quarter, weak global product sales (as dealers continue to rebalance their inventory after building them up during the pandemic), and ongoing weakness in residential HVAC sales.
Still, there's an opportunity for Johnson Controls to regain the trust of investors by hitting its 2024 guidance. If it can do so, the stock could be notably higher this time next year.
Should you buy these stocks now?
For investors looking to power their portfolios with a leading energy dividend stock, Chevron is a great consideration -- one that's even more attractive with the Hess acquisition. Those uninterested in playing in the oil patch, however, should certainly give Johnson Controls, a leader in smart building solutions, a close look.
Should you invest $1,000 in Chevron right now?
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Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool recommends Chevron. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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By Sabrina Valle
HOUSTON, Dec 19 (Reuters) - Shell PLC SHEL.L and Equinor ASA EQNR.OL on Tuesday greenlit a 90,000 barrels per day (bpd) oil and gas platform in the U.S. Gulf of Mexico and said it will aggressively invest in exploration to continue production through 2050.
Called Sparta, it is the first Gulf of Mexico project launched under Shell Chief Executive Wael Sawan, who earlier this year pulled back on the company's energy transition plans to boost profits from oil. Production is set to start in 2028.
"You will see us continuing to explore quite aggressively in the Gulf of Mexico and then develop those resources as well," Rich Howe, executive-vice president of Shell’s Global Deep Water business, told Reuters.
The investment cost was not disclosed.
Shell this year scrapped a plan to reduce oil output by 1% to 2% per year and said it would keep liquids production flat for 2030. It has not disclosed plans per basin, but it has been investing in the U.S. Gulf after reducing production elsewhere.
"We will target to do better than hold (production) flat" in the U.S. Gulf, Howe said, adding that a 10% natural decline meant the company would need new output of 40,000 bpd every year to keep production steady.
Shell holds a 51% stake in Sparta and will operate the platform, with Equinor holding the remaining share. The project originally was called North Platte and operated by TotalEnergies, which left the project in 2022.
In a prior role as director of Shell's upstream business, Sawan oversaw the U.S. Gulf 100,000 bpd Whale project, which is set to start production next year with partner Chevron Corp CVX.N.
Before rising to CEO, Sawan oversaw Shell's divestment in the U.S. shale basin, which helped the company largely achieve a previous goal to cut oil output by 20% by 2030.
This year, Shell and Equinor started production at the 100,000 bpd Vito oil platform, the model for both the subsequent Whale and Sparta projects. Sparta will be Shell’s 15th project in the Gulf of Mexico and could reach up to 100,000 bpd.
Shell will still be producing from the basin in 2050 as it offers lower costs and reduced emissions during the production process relative to other oil assets, Howe said.
(Reporting by Sabrina Valle; Editing by Sonali Paul)
((sabrina.valle@tr.com; Twitter: @sabrinavalle))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
In the contemporary age, the concept of top Dow stocks to buy seems rather anachronistic. After all, the underlying Dow Jones Industrial Average only covers 30 companies. Contrast that with other indexes that consider hundreds if not thousands of publicly traded securities.
However, the limited coverage of Dow stocks shouldn’t be conflated with a lack of relevance for individual enterprises. Indeed, a few companies stand out, either for their business vision or their undervalued or underappreciated profile. As the title of this article suggests, you might regret not considering the below ideas soon.
Yeah, I get it. Other indexes certainly carry a sexiness effect thanks to burgeoning innovations like artificial intelligence. Still, this old dog has a few new tricks up its sleeve. Below are top Dow stocks to put on your radar.
McDonald’s (MCD)
Source: Tama2u / Shutterstock
What it is: Frankly, if you don’t know what McDonald’s (NYSE:MCD), you might be in the wrong business. In all seriousness, MCD has been a staple among top Dow stocks since 1985, per The Washington Post. It’s a global fast-food giant but it also serves as an icon of American capitalism.
Relevance: To be sure, McDonald’s suffered some fading relevance as millennials and Generation Z gravitated toward healthier food and beverages. Still, with Gen Z, in particular, appreciating custom beverages and snacks – something that rival Starbucks (NASDAQ:SBUX) is known for – the Golden Arches responded with a new business initiative called CosMc’s. From early reports, the new drive-thru-only brand seems to be a hit.
Pros: McDonald’s isn’t the sexiest idea among Dow stocks. However, it gets the job done through solid revenue growth and consistent profitability. Analysts also rate shares a consensus strong buy with a $313.70 average price target.
Cons: MCD has demonstrated sizable choppiness over the past 52 weeks so caution is warranted.
Chevron (CVX)
Source: Sundry Photography / Shutterstock.com
What it is: A giant within the hydrocarbon energy industry, Chevron (NYSE:CVX) distinguishes itself as the only oil and gas component among Dow stocks. That’s not necessarily a good thing. After all, the political and ideological winds favor alternative energy sources. However, the world currently runs on oil, irrespective of the electrification of mobility. That trend could last for longer than many expect.
Relevance: When it comes to the relevance of Chevron as one of the top Dow stocks to buy, the focus centers on the science. Yes, renewable energy sources and other alternatives have come to the forefront thanks to technology and economies of scale. Still, fossil fuels command extraordinary energy density. Because of this reality, don’t be shocked if CVX continues to attract investor dollars.
Pros: Overall, Chevron benefits from solid long-term revenue growth and reasonably consistent profitability. Analysts peg shares a consensus moderate buy with a $179.59 average price target.
Cons: Economic concerns (demand erosion) and geopolitical factors combined to weaken the oil market recently.
Disney (DIS)
Source: chrisdorney / Shutterstock
What it is: An icon in the broader entertainment industry, Disney (NYSE:DIS) helps shape popular culture. While that’s an enviable position to be in as one of the top Dow stocks, it also generates controversy. I don’t want to step onto the political minefield. However, it would be disingenuous not to acknowledge the heated discourse between the Magic Kingdom and ideologically conservative voices.
Relevance: At the moment, Disney isn’t exactly doing so well in the equities space. That might seem a victory for the anti-woke advocates. However, we can’t ignore that the company commands a massive entertainment and theme park portfolio. Like it or not, people gravitate toward the brand, which is why Gurufocus labels DIS significantly undervalued based in part on future projected business.
Pros: While questions surround Disney, it does print solid revenue growth and consistent profitability metrics. That has convinced analysts to rate DIS a strong buy with a $108.45 price target, implying 16% upside.
Cons: To be clear, DIS is not undervalued against traditional metrics. For example, it trades at a staggeringly high 73X trailing-year earnings.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
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The post 3 Dow Stocks You’ll Regret Not Buying Soon: December Edition appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
With another year in the global markets coming to a close, now is a great time to consider stocks to buy for 2024. Part of the reason is to establish a framework for navigating the myriad uncertainties that could lie ahead.
For example, there’s a lot of talk about the Federal Reserve’s monetary policy these days. With the central bank broadcasting the acknowledgment of a possible policy pivot, the development sparked considerable enthusiasm of what could lie ahead. That helps fuel motivation for forecasting the top stocks for 2024.
Nevertheless, factors such as a surprisingly robust jobs report indicates that the economy continues to hum. If so, interest rate cuts would presumably worsen inflation, not ameliorate it. That could also affect potential stock picks for 2024.
Because of so many moving parts, investors need a diverse range of ideas to feel comfortable. Below are several ideas for stocks to buy for 2024 that cover major industries.
Casella Waste (CWST)
Source: Pavel Kapysh / Shutterstock.com
What it is: A waste management company, Casella Waste (NASDAQ:CWST) is a vertically integrated solid waste services specialist covering specific regions. It offers solutions across the clientele spectrum, from residences to businesses to municipal and industrial customers. Since the start of the year, CWST gained almost 10% of equity value. It features a market capitalization of $5 billion.
Relevance: While it’s a boring and dirty job, someone’s got to do it. At the broadest level, the global waste management market reached a valuation of over $1.29 billion last year. Further, experts project that the sector could print annual revenue of about $1.97 billion. Now, that’s slow and steady growth but that may apply to Casella’s business. Basically, as populations rise, so too does their waste production.
Pros: Casella enjoys a three-year revenue growth rate of 10.6%, above the sector median of 7.6%. Also, analysts rate CWST a unanimous strong buy with a $95.50 price target, implying over 10% upside.
Cons: As a regional player, Casella may be more exposed to regional problems (such as “brain drain”).
Procter & Gamble (PG)
Source: rblfmr/ShutterStock.com
What it is: A consumer goods giant, Procter & Gamble (NYSE:PG) really needs no introduction. Of course, I’ll provide one because it’s one of the stocks to buy for 2024 and probably for 2025 onward. P&G commands multiple brands, from fabric care products like Downy to the everyday products like Charmin toilet paper. It’s a beast with a market cap of $339.3 billion.
Relevance: Fundamentally, P&G benefits from decades of brand association. Basically, from cradle to the grave, generations of consumers have grown up with P&G brands. So, as adults, when it comes time to pick up detergent or dishwashing cleaners, they’re likely to pick the brands they know and trust. Besides, the underlying consumer goods sector enjoys permanent relevance.
Pros: That permanent relevance narrative carries over into the financials. No, P&G isn’t particularly sexy. However, it commands strong margins and consistent profitability. Analysts also view shares as a moderate buy with a $164.24 target, implying 14% upside.
Cons: While PG may arguably be one of the top stocks for 2024, it’s boring so actual upside may be limited.
Kenvue (KVUE)
Source: Giovanni Nastukov / Shutterstock.com
What it is: Spun off from healthcare giant Johnson & Johnson (NYSE:JNJ), Kenvue (NYSE:KVUE) takes over the consumer health business unit. Ahead of uncertainties in the broader economy, that might be the more attractive enterprise. We’re talking about everyday brands under the Kenvue umbrella, including Tylenol and Neutrogena, among many, many others. KVUE features a market cap of $40.2 billion.
Relevance: As stated earlier, Kenvue makes sense as one of the stock picks for 2024 because of its everyday demand profile. According to Precedence Research, the consumer healthcare market size reached a valuation of $284.16 billion last year. Further, experts anticipate that the sector could hit $608.39 billion by 2032. If so, that comes out to a compound annual growth rate (CAGR) of 7.91% from 2023.
Pros: While Kenvue may need some time to get its feet moving, it benefits from strong margins, particularly operating margins. Also, analysts rate shares a moderate buy with a $24 target, projecting over 14% growth.
Cons: Though KVUE could end up being one of the stocks to buy for 2024, the performance post-introduction has been disappointing.
Chevron (CVX)
Source: Sundry Photography / Shutterstock.com
What it is: Another enterprise that needs no introduction, Chevron (NYSE:CVX) is a hydrocarbon energy giant. As an integrated oil and natural gas stalwart, Chevron covers the core three areas of the energy value chain: upstream (exploration and production), midstream (storage and transportation) and downstream (refining and marketing). Right now, it sports a market cap of $281 billion.
Relevance: On surface level, Chevron might not seem a natural candidate for stocks to buy for 2024. First, you have the political and ideological pivot toward renewable energy. Second, the oil market fell under pressure as oil-producing nations’ production cuts disappointed the market. Still, fossil fuels command high energy density. You’re just not going to get that from wind and solar solutions.
Pros: While the future may belong to electric vehicles, the world continues to run on oil. This narrative may continue for longer than expected, making CVX one of the top stocks for 2024. Analysts also anticipate stock price growth of over 20%.
Cons: Since the start of the year, CVX slipped more than 14%. Therefore, investors will be absorbing risk.
Ollie’s Bargain Outlet (OLLI)
Source: George Sheldon / Shutterstock.com
What it is: A discount retailer, Ollie’s Bargain Outlet (NASDAQ:OLLI) offers a wide selection of household goods, apparel, pet supplies, kitchen pantry staples and seasonal products. It’s like any other discretionary retailer, with the main exception focused on discounts. Further, customers enjoy shopping at Ollie’s because of the bargain-hunting motivation. You never know what you might find. Ollie’s features a market cap of $4.24 billion.
Relevance: With American households going through rough times, discounts always command relevance. To put some data behind the thesis, Verified Market Research points out that the global discount store sector valuation reached $510.09 billion last year. Subsequently, experts project that the segment will expand at a CAGR of 5.35% from 2023 to 2030. At the culmination point, discount retailers could be worth $834.74 billion.
Pros: As I pointed out in my TipRanks article, OLLI may be one of the stocks to buy for 2024 based on expanding gross margins. Also, analysts rate shares a moderate buy with an $88.23 price target, implying over 28% growth.
Cons: OLLI lost more than 11% of equity value in the trailing month so caution is necessary.
Silicom (SILC)
Source: shutterstock.com/CC7
What it is: Based in Israel, Silicom (NASDAQ:SILC) specializes in the design, manufacture and marketing of connectivity solutions for a range of servers and server-based systems. With so much attention focused on front-line innovations such as artificial intelligence, other sectors – perceived to be mundane – have fallen by the wayside. For speculators, the shift in attention could be an undervalued opportunity. However, SILC is high risk with a market cap of only $113.24 million.
Relevance: By undergirding the connectivity industry, Silicom can move in multiple directions. Plus, the broader ecosystem is simply massive. Per MarketsandMarkets, the global connectivity sector for the Internet of Things (IoT) reached a valuation of $3.8 billion in 2019. Further, by 2024, the sector could be worth $8.9 billion. That comes out to a CAGR of 18.7%. If Silicom gets a piece of the pie, its shares could potentially skyrocket.
Pros: With consistent profitability yet a lowly trailing-year earnings multiple of 8.05X, there’s an argument that SILC is one of the stocks to buy for 2024 based on its undervalued profile. Also, Needham’s Alex Henderson anticipates a $22 price target, implying over 31% upside.
Cons: SILC suffered a heavy loss of nearly 61%, making it appropriate only for market gamblers.
B2Gold (BTG)
Source: Pavel Kapysh / Shutterstock.com
What it is: A Canadian mining enterprise, B2Gold (NYSEAMERICAN:BTG) owns and operates gold mines in Mali, Namibia and the Philippines. Given that its core business is inherently exposed to precious metals, BTG represents one of the riskiest ideas for top stocks for 2024. However, astute investors gambling on possible interest rate cuts may find BTG highly intriguing. BTG carries a market cap of roughly $4.08 billion.
Relevance: Fundamentally, the rise of the spot gold market may facilitate BTG as one of the stocks to buy for 2024. Also, according to Zion Market Research, the global gold mining sector reached a valuation of approximately $198 billion in 2022. Further, experts project slow and steady growth (3.5% CAGR) to 2030, culminating in a valuation of $260 billion.
Pros: Importantly, B2Gold features strong margins across the board and is reasonably consistently profitable. Analysts rate shares a strong buy with a $5.22 price target, projecting almost 66% upside.
Cons: Historically, gold mining firms tend to be volatile and BTG is no different, losing over 14% year-to-date.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
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The post 7 New Year’s Stocks to Buy to Get 2024 Off to a Bright Start appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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Below is Validea's guru fundamental report for CHEVRON CORPORATION (CVX). Of the 22 guru strategies we follow, CVX rates highest using our Price/Sales Investor model based on the published strategy of Kenneth Fisher. This value strategy rewards stocks with low P/S ratios, long-term profit growth, strong free cash flow and consistent profit margins.
CHEVRON CORPORATION (CVX) is a large-cap value stock in the Oil & Gas Operations industry. The rating using this strategy is 90% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
PRICE/SALES RATIO: PASS
TOTAL DEBT/EQUITY RATIO: PASS
PRICE/RESEARCH RATIO: PASS
PRICE/SALES RATIO: FAIL
LONG-TERM EPS GROWTH RATE: PASS
FREE CASH PER SHARE: PASS
THREE YEAR AVERAGE NET PROFIT MARGIN: PASS
Detailed Analysis of CHEVRON CORPORATION
CVX Guru Analysis
CVX Fundamental Analysis
More Information on Kenneth Fisher
Kenneth Fisher Portfolio
About Kenneth Fisher: The son of Philip Fisher, who is considered the "Father of Growth Investing", Kenneth Fisher is a money manager, bestselling author, and longtime Forbes columnist. The younger Fisher wowed Wall Street in the mid-1980s when his book Super Stocks first popularized the idea of using the price/sales ratio (PSR) as a means of identifying attractive stocks. According to his alma mater, Humboldt State University, Fisher is also one of the world's foremost experts on 19th century logging. Appropriately, Fisher's firm, Fisher Investments, is located in a lush forest preserve in Woodside, California, where the contrarian-minded Fisher says he and his employees can get away from Wall Street groupthink.
Additional Research Links
Top Energy Stocks
Dividend Aristocrats2023
Wide Moat Stocks2023
Cheapest Value Stocks2023
Factor-Based Stock Portfolios
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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CVX
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The most-read energy infrastructure research from 2023 tended to include both timely developments and topics with perennial attraction like natural gas. Today’s note discusses the topics and pieces from 2023 that were of the greatest interest to our investor audience.
M&A: A Key Theme in Midstream and Energy
Our most-read piece in 2023 by a significant margin was our note on ONEOK’s (OKE) acquisition of Magellan from May, OKE Acquiring MMP: Valuation Nice, Taxes Add Wrinkle. This was a blockbuster transaction for the midstream/MLP space and garnered significant investor interest through the deal’s close in September.
More broadly, consolidation was a key theme across energy this year. Our August note, Better Together: Energy Consolidation Continues, recapped energy sector tie-ups and saw strong interest. Notably, the note preceded the announcements of Exxon (XOM) acquiring Pioneer (PXD) and Chevron (CVX) acquiring Hess (HES).
Natural Gas: Always a Crowd Pleaser
Year after year, natural gas research tends to be a top performer. Our most recent coverage, US Natural Gas Prices: Winter Weather, Prices, and Production, discussed the outlook for natural gas into 2024 and 2025 following a lackluster price environment in 2023. For a longer-term perspective, Williams (WMB) and the Golden Age of Natural Gas highlighted structural drivers for growing natural gas demand in the U.S. and overseas as discussed in a fireside chat with WMB’s CFO John Porter.
Global liquefied natural gas (LNG) demand is expected to grow by upward of 60% through 2040 as discussed in Global LNG Market Poised for Long-Term Growth. Of course, the U.S. will play a major role in meeting growing this demand. U.S. LNG Projects Advance Even as Global Prices Slump provided an overview of the incremental LNG export capacity currently being developed in the U.S. Coastal British Columbia is home to a handful of LNG export projects, as discussed in Canadian LNG Projects Advance to Meet Asian Demand. Growing LNG exports from the U.S. and Canada have created growth opportunities for midstream companies.
Natural Gas Liquids: Less Familiar Hydrocarbons Attract Interest
Natural gas liquids (NGLs) tend to be less familiar to investors. But they play an important role in driving growth for midstream. Perhaps that contributed to strong interest in notes on ethane, MLPs and the Fastest-Growing Hydrocarbon You’ve Not Heard Of, and propane, Propane Helps Fuel Midstream/MLP Growth. NGL production has increased alongside growing oil and gas output. And strong international demand for ethane and propane for plastics manufacturing has supported growing exports from the U.S.
Taxes Aren’t Always Boring
An MLP tax primer in April was well-timed for catching the attention of investors. MLPs and MLP ETFs: Not Just Income, but Tax-Deferred Income explained the nuances of taxation for owning an individual MLP vs. an MLP ETF. With the Alerian MLP Infrastructure Index (AMZI) yielding 7.8% as of December 14, investors tend to recognize that MLPs offer generous yields. They are typically less familiar with tax advantages that often come with MLP income, namely the potential for tax deferral.
AMZI is the underlying index for the Alerian MLP ETF (AMLP) and the ETRACS Alerian MLP Infrastructure Index ETN Series B (MLPB).
Top 2023 Research:
OKE Acquiring MMP: Valuation Nice, Taxes Add Wrinkle
Better Together: Energy Consolidation Continues
US Natural Gas Prices: Winter Weather, Prices, and Production
U.S. LNG Projects Advance Even as Global Prices Slump
Global LNG Market Poised for Long-Term Growth
Canadian LNG Projects Advance to Meet Asian Demand
Williams (WMB) and the Golden Age of Natural Gas
MLPs and the Fastest-Growing Hydrocarbon You’ve Not Heard Of
Propane Helps Fuel Midstream/MLP Growth
MLPs and MLP ETFs: Not Just Income, but Tax-Deferred Income
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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By Sruthi Shankar and Johann M Cherian
Dec 18 (Reuters) - U.S. stock indexes edged higher on Monday, with oil stocks in the lead after mounting attacks in the Red Sea lifted crude prices, while shares of U.S. Steel rocketed after a $14.9 billion buyout deal.
The main Wall Street indexes are looking to end 2023 on a high note as signs of slowing inflation boosted expectations that the U.S. central bank will soon ease its monetary policy.
The blue-chip Dow hit an all-time high for the fourth consecutive session, while the benchmark S&P 500 and the tech-heavy Nasdaq are trading near their highest levels of the year.
Oil majors Chevron CVX.Nclimbed 1.5% and Exxon Mobil XOM.Nadded 2.0% as crude prices LCOc1, CLc1 rallied more than 3.5% after attacks by the Houthis on ships in the Red Sea raised concerns of oil supply disruptions. O/R
The S&P 500 energy sub-index .SPNYclimbed 1.9%, leading gains among the 11 major S&P sectors.
Another big gainer was United States SteelX.N, which surged 26.0% to an over 12-year high after Japan's Nippon Steel 5401.Tsaid it would buy the steelmaker in a $14.9 billion deal including debt.
Investors will focus on economic data this week including the personal consumption expenditure index (PCE) - the Fed's preferred inflation gauge - weekly jobless claims, housing starts and the final reading of the third-quarter GDP report to gauge the path of U.S. interest rates.
The benchmark S&P 500 marked a seventh straight week of gains on Friday - its longest winning streak since 2017 - fueled by optimism about a Fed policy pivot next year.
Traders are currently pricing in a 70% chance that the Fed will cut interest rates at least by 25 basis points in March, according to CME Group's FedWatch tool, even as top Fed policymakers pushed back on the ebullience.
Cleveland Fed President Loretta Mester, a voting member next year, said financial markets had got "a little bit ahead" of the central bank on when to expect interest rate cuts, as per a report.
"There's still a dislocation between a seemingly dovish pivot that the market is expecting the Federal Reserve to take, and what economists are projecting," said Keith Buchanan, senior portfolio manager at GLOBALT Investments.
"The direction is the same, it's just that the velocity of cuts and the magnitude of cuts might not be on the same page."
At 10:04 a.m. ET, the Dow Jones Industrial Average .DJI was up 10.14 points, or 0.03%, at 37,315.30, the S&P 500 .SPX was up 17.45 points, or 0.37%, at 4,736.64, and the Nasdaq Composite .IXIC was up 54.51 points, or 0.37%, at 14,868.43.
Goldman Sachs raised its forecast for the S&P 500, which it now sees ending 2024 at 5,100, while decelerating inflation and Fed easing would keep real yields low.
Among other single stocks, AppleAAPL.Oslipped 1.3% after more Chinese agencies and state-backed companies asked their staff to not bring iPhones and other foreign devices to work, a report said.
AdobeADBE.Oadded 1.6% after the Photoshop maker and Figma agreed to terminate their $20 billion merger announced last year.
VF CorpVFC.Ntumbled 8.5% after the Vans sneaker maker said it was investigating "unauthorized" activity on its computer systems, an incident that was likely to have a material impact on its business.
The S&P index recorded 23 new 52-week highs and two new lows, while the Nasdaq recorded 71 new highs and 46 new lows.
(Reporting by Sruthi Shankar and Johann M Cherian in Bengaluru; Editing by Maju Samuel)
((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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The most recent trading session ended with Chevron (CVX) standing at $149.68, reflecting a +0.22% shift from the previouse trading day's closing. This move lagged the S&P 500's daily gain of 0.45%.
Investors will be eagerly watching for the performance of Chevron in its upcoming earnings disclosure. The company is forecasted to report an EPS of $3.60, showcasing a 11.98% downward movement from the corresponding quarter of the prior year. Meanwhile, our latest consensus estimate is calling for revenue of $54.87 billion, down 2.84% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates project earnings of $13.27 per share and a revenue of $208.64 billion, demonstrating changes of -29.53% and -15.27%, respectively, from the preceding year.
Investors should also note any recent changes to analyst estimates for Chevron. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 2.25% lower. Currently, Chevron is carrying a Zacks Rank of #3 (Hold).
From a valuation perspective, Chevron is currently exchanging hands at a Forward P/E ratio of 11.25. Its industry sports an average Forward P/E of 6.64, so one might conclude that Chevron is trading at a premium comparatively.
It is also worth noting that CVX currently has a PEG ratio of 0.79. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Oil and Gas - Integrated - International industry held an average PEG ratio of 0.84.
The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 92, putting it in the top 37% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
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Chevron Corporation (CVX) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Chevron Corporation (Symbol: CVX), where a total volume of 51,833 contracts has been traded thus far today, a contract volume which is representative of approximately 5.2 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 42.8% of CVX's average daily trading volume over the past month, of 12.1 million shares. Particularly high volume was seen for the $152.50 strike call option expiring December 22, 2023, with 5,762 contracts trading so far today, representing approximately 576,200 underlying shares of CVX. Below is a chart showing CVX's trailing twelve month trading history, with the $152.50 strike highlighted in orange:
Schneider National Inc (Symbol: SNDR) saw options trading volume of 2,583 contracts, representing approximately 258,300 underlying shares or approximately 42.6% of SNDR's average daily trading volume over the past month, of 606,495 shares. Especially high volume was seen for the $22.50 strike call option expiring January 19, 2024, with 2,500 contracts trading so far today, representing approximately 250,000 underlying shares of SNDR. Below is a chart showing SNDR's trailing twelve month trading history, with the $22.50 strike highlighted in orange:
And Visa Inc (Symbol: V) saw options trading volume of 24,750 contracts, representing approximately 2.5 million underlying shares or approximately 42.5% of V's average daily trading volume over the past month, of 5.8 million shares. Especially high volume was seen for the $267.50 strike call option expiring December 22, 2023, with 8,301 contracts trading so far today, representing approximately 830,100 underlying shares of V. Below is a chart showing V's trailing twelve month trading history, with the $267.50 strike highlighted in orange:
For the various different available expirations for CVX options, SNDR options, or V options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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By Sruthi Shankar and Johann M Cherian
Dec 18 (Reuters) - U.S. stock indexes edged higher on Monday, with oil stocks gaining after mounting attacks in the Red Sea lifted crude prices, while shares of U.S. Steel rocketed after a $14.9 billion buyout deal.
The main Wall Street indexes are looking to end 2023 on a high note as signs of slowing inflation boosted expectations that the U.S. central bank will soon ease its monetary policy.
The blue-chip Dow hit an all-time high for the fourth consecutive session, while the benchmark S&P 500 is nearly 1% away from its highest closing level it hit in January 2022.
Oil majors Chevron CVX.Nclimbed 0.8% and Exxon Mobil XOM.Nadded 1.7% as crude prices LCOc1, CLc1 rallied nearly 3% as mounting attacks by the Yemeni Houthis on ships in the Red Sea disrupted maritime trade and raised concern of supply disruption. O/R
The S&P 500 energy sub-index .SPNYclimbed 1.5%, and was among top-gainers among the 11 major S&P sectors, but is still the only major sector on course for losses quarter-to-date, down nearly 7%.
"Commodities in general have sold off a good bit this year, which has helped the CPI number continue to move down," said Alex McGrath, CIO a for NorthEnd Private Wealth.
"But if you get a sustained rise in energy prices, it just keeps that CPI number stickier than the Fed would want it to be, and that could put (interest rate) cuts down the road further away."
Meanwhile, United States SteelX.N surged 27.1% to an over 12-year high after Japan's Nippon Steel 5401.T said it would buy the steelmaker in a $14.9 billion deal including debt.
Later in the week, investors will focus on economic data including the personal consumption expenditure index (PCE) - the Fed's preferred inflation gauge - weekly jobless claims, housing starts and the final reading of the third-quarter GDP report to gauge the path of U.S. interest rates.
Traders are currently pricing in a 70% chance that the Fed will cut interest rates at least by 25 basis points in March, according to CME Group's FedWatch tool, even as top Fed policymakers pushed back on the ebullience.
Chicago Fed President Austan Goolsbee said the U.S. central bank is not precommiting to cutting interest rates soon and swiftly.
Goldman Sachs raised its forecast for the S&P 500, which it now sees ending 2024 at 5,100, while decelerating inflation and Fed easing would keep real yields low.
Among other stocks, AppleAAPL.Oslipped 1.4% after more Chinese agencies and state-backed companies asked their staff to not bring iPhones and other foreign devices to work, a report said.
VF CorpVFC.Ntumbled 7.5% after the Vans sneaker maker said it was investigating "unauthorized" activity on its computer systems, an incident that was likely to have a material impact on its business.
Advancing issues outnumbered decliners by a 1.15-to-1 ratio on the NYSE and for a 1.10-to-1 ratio on the Nasdaq.
(Reporting by Sruthi Shankar and Johann M Cherian in Bengaluru; Editing by Maju Samuel)
((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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In early trading on Monday, shares of Chevron topped the list of the day's best performing Dow Jones Industrial Average components, trading up 1.6%. Year to date, Chevron has lost about 15.5% of its value.
And the worst performing Dow component thus far on the day is Intel, trading down 1.4%. Intel is showing a gain of 72.2% looking at the year to date performance.
Two other components making moves today are Apple, trading down 1.1%, and Merck, trading up 1.1% on the day.
VIDEO: Dow Movers: INTC, CVX
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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By Sruthi Shankar and Johann M Cherian
Dec 18 (Reuters) - Wall Street's main stock indexes were on track to open higher on Monday as investors awaited economic data later in the week that could offer insights on when the Federal Reserve could start cutting interest rates.
The main Wall Street indexes are looking to end 2023 on a high note as signs of slowing inflation and expectations that the U.S. central bank will soon ease its monetary policy attract buyers. The blue-chip Dow .DJI notched its third consecutive session of record high on Friday, while the benchmark S&P 500 .SPX marked a seventh straight week of gains in its longest winning streak since 2017.
Economic data this week include the Personal Consumption Expenditure index (PCE) - the Fed's favored inflation gauge - weekly jobless claims, housing starts and the final reading of the third-quarter GDP report.
U.S. equity markets rallied last week after the Fed left interest rates unchanged and officials' forecasts collectively priced in three quarters of a percentage point in cuts in 2024.
Traders are currently pricing in a 75% chance that the Fed will cut interest rates at least by 25 basis points in March, according to CME Group's FedWatch tool, even as top Fed policymakers pushed back on the ebullience.
Cleveland Fed President Loretta Mester, a voting member next year, said financial markets had got "a little bit ahead" of the central bank on when to expect interest rate cuts, as per a report.
"There's still a dislocation between a seemingly dovish pivot that the market is expecting the Federal Reserve to take, and what economists are projecting," said Keith Buchanan, senior portfolio manager at GLOBALT Investments.
"The direction is the same, it's just that the velocity of cuts and the magnitude of cuts might not be on the same page."
At 8:36 a.m. ET, Dow e-minis 1YMcv1 were up 58 points, or 0.15%, S&P 500 e-minis EScv1 were up 13 points, or 0.27%, and Nasdaq 100 e-minis NQcv1 were up 25 points, or 0.15%.
Meanwhile, Goldman Sachs raised its forecast for the S&P 500, which it now sees ending 2024 at 5,100, while decelerating inflation and Fed easing would keep real yields low.
Among single stocks, AppleAAPL.Oslipped 0.6% in premarket trading after more Chinese agencies and state-backed companies asked their staff to not bring iPhones and other foreign devices to work, a report said.
Oil stocks Exxon Mobil XOM.Nand Chevron CVX.Nadvanced 1.4% each, as crude prices gained over 2% after attacks by the Houthis on ships in the Red Sea raised concerns of oil supply disruptions. O/R
United States SteelX.N surged 28.7% after Japan's Nippon Steel 5401.Tsaid it would buy the steelmaker in a $14.9 billion deal including debt.
AdobeADBE.Oadded 2% after the Photoshop maker and Figma agreed to terminate their $20 billion merger announced last year.
U.S.-listed shares of NioNIO.N climbed 9.0% after the company said it had signed an agreement with CYVN Holdings, for the latter to invest $2.2 billion in the Chinese electric vehicle maker.
(Reporting by Sruthi Shankar and Johann M Cherian in Bengaluru; Editing by Maju Samuel)
((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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By Deisy Buitrago
CARACAS, Dec 18 (Reuters) - Venezuelan state oil company PDVSA and joint venture partner Repsol REP.MCon Monday signed an agreement amending the original terms of a project in the country, aiming to revive its crude and gas output.
The agreement for production joint venture Petroquiriquire, which includes the fields Quiriquire, Mene Grande and Barua-Motatan, was signed in Caracas by Venezuela's oil minister Pedro Tellechea and executives from Repsol.
"We are going to lift production. We have completed the planning of the agreements we are signing. They all have output forecasts and plans for operation expansions," Tellechea said.
PDVSA and Chevron CVX.N last week received approval from the country's National Assembly to extend two separate joint ventures for 15 years.
The changes to the Petroquiriquire operating agreement were not immediately disclosed. The United States in October temporarily lifted oil sanctions on the South American country, allowing exports, imports and investments through April.
The joint venture, in which PDVSA has a 60% interest and Repsol the remaining 40%, operates in several areas of the country, including the Monagas North region. Its total production has been about 20,000 barrels per day (bpd) of crude and 40 million cubic feet per day of gas so far this year, according to independent calculations.
Tellechea also said Venezuela continues working to ramp up crude output towards a 1 million bpd goal.
(Reporting by Deisy Buitrago, writing by Marianna Parraga. Editing by Julia Symmes-Cobb)
((marianna.parraga@thomsonreuters.com; +1 713 371 7559; Reuters Messaging: @mariannaparraga))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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U.S. supermajor Chevron Corporation CVX is making significant cutbacks in its oil-refinery investments in California, citing what it deems as "adversarial" policies toward fossil fuels in the state. The San Francisco Bay area-based oil giant has cut spending in California by "hundreds of millions of dollars since 2022," according to comments submitted to the California Energy Commission.
Chevron, a major supplier of jet fuel to airports in San Francisco and Los Angeles, says it's doing this because of the tough business environment and not making enough profit due to California's strict fuel standards and carbon cap-and-trade program.
Chevron Blames California Policies
Chevron's decision to cut spending comes amid California lawmakers' considerations to limit profits for refiners within the state. This move could affect the already high prices at gas pumps in California. Governor Gavin Newsom has ambitious environmental goals, aiming for an 85% reduction in climate-damaging emissions by 2045.
Despite these goals, Chevron argues that California's policies, including a recent law allowing the California Energy Commission to set a maximum gasoline refining margin, have made it difficult for them to invest in the state. Chevron's president, Andy Walz, says that strict rules on investment have severely limited refiners' ability to respond to higher prices.
Impact on Renewable Fuels
Chevron is not only worried about traditional refining but also about the renewable fuels sector. The company believes that the state's proposed profit margin cap will limit investments in renewable fuels. While other refiners in California are spending a lot on converting to renewable diesel, Chevron sees the margin cap as something that might discourage overall investment by energy companies in the state. In a letter to the California Energy Commission, Walz warns that a margin penalty will not only reduce investment in gasoline but also slow down the growth of renewable energy investments in California.
California's Energy Landscape
California's ambitious climate targets, such as a 94% reduction in gasoline demand by 2045, have encouraged investments in eco-friendly options like renewable diesel and biodiesel. However, Chevron's recent reduction in spending underscores the difficulties faced by companies in a state with stringent environmental rules. Despite progress in adopting electric vehicles and decreasing traditional diesel use, California still leads in jet fuel consumption and ranks second in gasoline usage in the United States. The state's pump prices, usually the highest nationwide, have been 35% above average this year.
Zacks Rank & Stock Picks
Chevron is one of the largest publicly traded oil and gas companies in the world, with operations that span almost every corner of the globe. The company carries a Zacks Rank #3 (Hold) at present.
Meanwhile, investors interested in the energy sector might look at operators like Murphy USA MUSA, EOG Resources EOG and Liberty Energy LBRT, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Murphy USA: Murphy USA beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters and missed in the other two. It has a trailing four-quarter earnings surprise of 7%, on average.
Murphy USA is valued at around $7.7 billion. The company has seen its shares gain 25.1% in a year.
EOG Resources: EOG Resources beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. EOG has a trailing four-quarter earnings surprise of 9.2%, on average.
EOG is valued at around $69.1 billion. The company has seen its shares drop 4.1% in a year.
Liberty Energy: The 2023 Zacks Consensus Estimate for LBRT indicates 52.1% year-over-year earnings per share growth.
Liberty Energy is valued at around $3 billion. LBRT has seen its shares rise 18.8% in a year.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
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Chevron Corporation (CVX) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
Murphy USA Inc. (MUSA) : Free Stock Analysis Report
Liberty Energy Inc. (LBRT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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The energy sector is down 8.2% so far this year, driven by declines in oil prices and a cooldown from a red-hot 2022. However, the sector can still do very well even at current prices. In fact, many companies are banking on oil staying where it is or suffering only a minor decline. Here's why the energy sector is set up nicely for 2024 and why it could be worth investing in now.
Image source: Getty Images.
Consolidation is driving the upstream industry
The last few months have featured a flurry of mergers and acquisitions on the upstream side of the energy sector. In October, ExxonMobil (NYSE: XOM) announced an all-stock merger with Permian Basin producer Pioneer Natural Resources for $59.5 billion. Later that month, Chevron (NYSE: CVX) announced a merger with Hess for $53 billion, gaining access to the oil reserves offshore Guyana among other global plays. And earlier this month, Occidental Petroleum (NYSE: OXY) announced a $12 billion acquisition of privately held Permian producer CrownRock.
In the case of Exxon and Oxy, the idea is to get more acreage in a familiar region. This approach can save costs through synergies and boost free cash flow (FCF) if done right. Chevron's deal is a diversification move. It gives it access to a low-cost offshore oil play, which pairs nicely with its existing Permian and liquefied natural gas position.
The deals vary in scope and scale. But the rationale behind them is the same: produce more oil and gas at a lower cost per barrel. It's good old-fashioned leverage that can amplify gains during certain conditions and compound losses if oil prices take a turn for the worse.
On Dec. 6, ExxonMobil published a corporate plan centered around doubling its earnings by 2027 based on Brent crude oil (the international benchmark) averaging $60 a barrel. However, it also said that 90% of its planned upstream capital investments over the next five years will be able to return 10% or more even if Brent crude oil is $35 a barrel. That's a massive margin for error on the downside and plenty of upside potential even for mediocre oil prices.
Assuming its merger with Hess goes through, Chevron expects to be able to double its free cash flow by 2027. On the downside, Chevron said it is "built for $50 Brent," as it can cover its capital expenditures and dividend payments at that level in addition to its operating costs.
Meanwhile, Occidental Petroleum expects to be able to generate an additional $1 billion in free cash flow in the first year following its acquisition, assuming $70 West Texas Intermediate (WTI) crude oil (the U.S. benchmark). Oxy also said that the acquisition increased the portion of its unconventional portfolio that can break even below $40 oil by 33%.
Exxon, Chevron, and Oxy are just a few of the many upstream producers. But in general, a lot of upstream corporate plans are based around breaking even somewhere around $40 a barrel, and assuming a price of $60 to $70 to fund long-term growth. For example, ConocoPhillips (NYSE: COP) has a 10-year plan to grow FCF at a compound annual growth rate of 6% to 11% per year based on $60 WTI oil prices. But ConocoPhillips can also achieve FCF breakeven at $35 per barrel of WTI crude.
Improved financial strength
As much as oil and gas producers will try to build a growth plan around a certain price range, there's simply no telling what energy prices will do in the short term. Even if oil prices take a huge dip, many producers have the balance sheets needed to weather the storm. Sure, companies like Oxy are taking on a lot of debt and banking on at least decent oil prices.
But in the case of Exxon, Chevron, and ConocoPhillips, these companies can still fund growth plans even if oil prices fall, and pause buybacks and pull back on spending if prices collapse. Moreover, these three companies sport excellent balance sheets, with total net long-term debt positions and debt-to-capital leverage ratios near 10-year lows.
CVX Debt To Capital (Quarterly) data by YCharts
In short, the balance sheets and the cost profiles of many top producers should allow these companies to thrive even if oil prices stay the same or fall to an extent. While the industry as a whole should rake in the cash if oil prices rebound to levels they were at just a few months ago (in the $80 to $90 WTI range).
What about midstream and downstream?
Although the integrated majors and upstream producers make up the majority of the energy sector, there's still the transportation and storage (midstream) and refining and marketing (downstream) segments to consider.
Many midstream companies feature slow growth but pay high dividends thanks to the reliability that comes from long-term contracts. These contracts, many of which are take-or-pay (paid no matter what) or fee-based (locked-in prices) limit exposure to oil and gas prices. Many companies want to avoid over-expanding or building infrastructure that won't be needed as the energy transition accelerates in the years to come. Overall, the midstream industry is a good value with manageable debt and attractive dividends.
Downstream leaders like Valero, Marathon Petroleum, and Phillips 66 also have inexpensive valuations. Despite excellent results, many downstream stocks have sold off over the last few months. Renewable energy is having a major impact on power generation. And electric vehicles have certainly pierced the passenger vehicle market. But refining crude oil into useful sources is an essential process that underpins modern society and the transportation industry.
How to think about 2024
The Energy Select Sector SPDR Fund (NYSEMKT: XLE), which tracks the performance of the broader energy sector, has a yield of 3.6% and a price to earnings ratio of just 7.5. Granted, these earnings are based on the last 12 months, which featured higher oil prices. But still, the sector is cheap and does a good job of unlocking income and value from the integrated majors, conservative producers, the midstream industry, and the downstream industry, which also balances out the high risk and volatility that comes with more aggressive and smaller producers.
The sector stands out as a haven for value and passive income, as well as strong earnings results, even if oil and gas prices stay the same or modestly decline.
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Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool recommends Chevron, Occidental Petroleum, and Pioneer Natural Resources. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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Chevron Corporation CVX, a U.S. oil giant, and a unit of Venezuela's state oil company PDVSA are actively seeking a 15-year extension for two of their joint ventures (JVs). This strategic initiative was revealed by deputy minister Erick Perez during a recent conference, shedding light on the potential for expanded operations and increased crude exports between the two entities.
Expanding Operations Under a Special U.S. License
Since late last year, Chevron and PDVSA have navigated their operations under a special U.S. license. This unique arrangement has allowed Venezuela to resume crude exports to its largest market, the United States. However, achieving pre-sanction production level demands further investment, setting the stage for the JVs’ extended collaboration.
Project Overview: Petroboscan and Petroindependiente
Petroboscan: Sustaining Production of Heavy Crude
Petroboscan, the largest of the two joint projects, currently produces approximately 65,000 barrels per day (bpd) of heavy crude. To ensure sustained growth and efficiency, the project requires a substantial investment of $1.28 billion and operational expenses of $3.35 billion over the proposed 15-year extension period.
Petroindependiente: Nurturing Growth and Innovation
The second project, Petroindependiente, is aimed at continued development. With an investment requirement of $10.7 million and operational expenses amounting to $205 million, this venture is poised to contribute to the overall resilience and prosperity of the collaboration.
Regulatory Hurdles and National Assembly's Role
Venezuela's National Assembly, currently dominated by the government's party following an election without international observation, stands as a crucial gatekeeper. The fate of the JVs’ extension request rests in the hands of the assembly, which is expected to thoroughly deliberate before granting the green signal. This political landscape adds a layer of complexity to the business proceedings.
OPEC Quota Dynamics
Perez also addressed Venezuela's current standing within the OPEC framework. With the nation's oil output lagging below its 1.9 million-bpd OPEC quota due to sanctions, Venezuela seeks continued exemption from planned OPEC+ output cuts. Perez highlighted the imperative need to surpass the sanctions-induced limitations, emphasizing a commitment to ramping up production to meet global demands.
Offshore Gas Project Revival: Plataforma Deltana
To diversify its energy portfolio, Venezuela is actively working to revive the dormant offshore gas project, Plataforma Deltana. Situated near waters reclaimed by Guyana, this ambitious project signifies the nation's commitment to exploring new frontiers in the energy sector. However, specific details about the project's revival remain undisclosed at this point.
Conclusion
Chevron and PDVSA's pursuit of a 15-year extension for their JVs marks a significant stride toward fostering sustained growth and collaboration. The intricate interplay of economic, political and regulatory factors adds a layer of complexity to these initiatives. As the global energy landscape continues to evolve, these JVs serve as a testament to the resilience and adaptability of major players like Chevron and PDVSA.
Zacks Rank and Key Picks
Currently, CVX carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like The Williams Companies WMB, sporting a Zacks Rank #1 (Strong Buy), and Murphy USA Inc. MUSA and Liberty Energy Inc. LBRT, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Williams Companies is valued at $42.12 billion. The company currently pays a dividend of $1.79 per share, or 5.17%, on an annual basis.
WMB, the U.S.-based energy infrastructure company, operates through Transmission & Gulf of Mexico, Northeast G&P, West and Gas & NGL Marketing Services segments.
MUSA is worth $7.68 billion. In the past year, its shares have risen 24.6%.
MUSA is involved in the marketing of retail motor fuel products and convenience merchandise. It operates retail gasoline stores principally in the Southeast, Southwest and Midwest United States.
Liberty Energy is valued at $3.1 billion. LBRT currently pays a dividend of 28 cents per share, or 1.52%, on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to the North American onshore exploration and production companies.
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Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
Murphy USA Inc. (MUSA) : Free Stock Analysis Report
Liberty Energy Inc. (LBRT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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Launched on 12/16/2016, the Pacer US Cash Cows 100 ETF (COWZ) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Pacer Etfs. COWZ has been able to amass assets over $17.74 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the Pacer US Cash Cows 100 Index.
The Pacer US Cash Cows 100 Index uses an objective, rules-based methodology to provide exposure to large and mid-capitalization U.S. companies with high free cash flow yields.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.49% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.97%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For COWZ, it has heaviest allocation in the Energy sector --about 35.20% of the portfolio --while Consumer Discretionary and Healthcare round out the top three.
When you look at individual holdings, Chevron Corp New (CVX) accounts for about 2.67% of the fund's total assets, followed by Marathon Pete Corp (MPC) and Valero Energy Corp (VLO).
Its top 10 holdings account for approximately 22.31% of COWZ's total assets under management.
Performance and Risk
So far this year, COWZ has added about 13.62%, and is up about 12.20% in the last one year (as of 12/18/2023). During this past 52-week period, the fund has traded between $44.32 and $52.25.
The fund has a beta of 1.07 and standard deviation of 19.31% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Cash Cows 100 ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $54.58 billion in assets, Vanguard Value ETF has $104.74 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Pacer US Cash Cows 100 ETF (COWZ): ETF Research Reports
Chevron Corporation (CVX) : Free Stock Analysis Report
Valero Energy Corporation (VLO) : Free Stock Analysis Report
Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
I generally have two methods for deciding whether stocks are ultracheap. The first method involves comparing the name’s price-earnings or price-sales ratio to its previous growth, and its expected growth in future years. Generally, if a company is growing very rapidly but its valuation is slightly above average or lower, I would view it as very cheap. Similarly, if a firm is expanding at an average rate and its valuation is way below average, I’d consider it to be ultracheap.
My second method for identifying cheap stocks involves companies that I believe have tremendous potential. Specifically, if I think that a relatively small firm can easily become the leader of its sector, I try to estimate how much its valuation would probably increase if it achieved that milestone. If I think that the shares would increase at least 300% in such a scenario, I view them as ultracheap. With that said, here are three ultracheap stocks to buy for big gains.
Rivian (RIVN)
Source: Tada Images / Shutterstock.com
Rivian (NASDAQ:RIVN) looks poised to become the next Tesla (NASDAQ:TSLA). And RIVN may ultimately become even more successful than Tesla!
Rivian delivered an impressive total of over 15,560 EVs last quarter, way up from 6,584 deliveries in the same period a year earlier. So the firm is clearly growing tremendously, while the demand for its EVs remains very strong. Moreover, the online reviews of its EVs range from very good to excellent, indicating that users are quite happy with their cars.
One reason why I believe that Rivian could ultimately become more successful than Tesla is that two huge companies seem to love Rivian’s EVs. Amazon (NASDAQ:AMZN) is deploying tens of thousands of Rivian delivery vans, and AT&T (NYSE:T) recently agreeing to test the start-up’s vans and trucks.
I don’t remember any large firms buying Tesla’s vehicles early in its existence, and even now, the only businesses that seem enamored with Teslas are car rental companies. By selling a large number of EVs to both consumers and companies, Rivian could, within several years, become one of the world’s largest automakers.
Even after the recent rally of RIVN stock, the shares have a market capitalization of just $21.5 billion, many times below Tesla’s $800 billion. Given that disparity, I view RIVN as one of the best ultracheap stocks to buy.
StoneCo (STNE)
Source: T. Schneider / Shutterstock.com
StoneCo (NASDAQ: STNE) provides financial technology and software solutions that facilitate e-commerce in Brazil.
Specializing in serving small-and-medium businesses, it already has 2.5 million customers, and its top line jumped 25% last quarter versus the same period a year earlier to roughly $630 million. The firm’s net income, excluding some items, soared 300% year-over-year to about $87 million.
Despite STNE’s rapid growth, its forward price-earnings ratio is just 15.2, which is well below the average P/E ratio of the S&P 500.
Also noteworthy is that Bank of America (NYSE:BAC) recently upgraded STNE stock, citing the company’s impressive Q3 results. The bank expects the company’s bottom line to grow at a compound annual rate of 31% between 2024 and 2027.
EVgo (EVGO)
Source: Sundry Photography / Shutterstock.com
Like Rivian, EVgo (NASDAQ:EVGO) is growing very rapidly and looks poised to transform from a fairly small start-up to a huge company in the not-too distant future.
Owning and operating one of the largest networks of EV fast chargers in the U.S., EVgo’s top line soared an incredible 234% last quarter versus the same period a year earlier to $35.1 million.
Moreover, EVgo is partnering with multiple, major automakers and receiving subsidies from state governments for the construction of hundreds of EV charging stations. As a result, EVGO will have a huge network of EV chargers, while millions of EV drivers will be incentivized by automakers to use its chargers. Consequently, I expect the company to continue growing very quickly for the foreseeable future.
Meanwhile, recently agreeing with my belief that the slowdown in EV demand has been greatly exaggerated was investment bank Piper Sandler. Specifically, the firm expects EV sales to reach 33% of the U.S. market in 2025, up from about 9% currently.
EVgo should be one of the huge beneficiaries of this development. As a result, it could become the Exxon (NYSE:XOM) or the Chevron (NYSE:CVX) of the 2030s and 2040s. While operating EV chargers won’t be nearly as lucrative as selling oil, there are obviously some similarities between the two businesses.
On the date of publication, Larry Ramer held long positions in EVGO and RIVN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.
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The post 3 Ultracheap Stocks to Buy for Big Gains appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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CVX
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For Immediate Release
Chicago, IL – December 18, 2023 – Today, Zacks Equity Research discusses Exxon Mobil Corp. XOM, Chevron Corp. CVX and BP plc BP.
Industry: Oil & Gas - Integrated
Link: https://www.zacks.com/commentary/2198526/3-integrated-energy-stocks-to-gain-from-a-promising-industry
Despite volatilities and uncertainties affecting the energy market, oil prices are highly favorable for upstream businesses. Integrated energy players’ midstream businesses are also sound since the companies generate stable fee-based revenues from pipeline and storage assets, thereby enhancing the outlook for the Zacks Oil and Gas Integrated Internationalindustry.
Among the frontrunners in the industry that will possibly make the most of the handsome business scenario are Exxon Mobil Corp., Chevron Corp. and BP plc.
About the Industry
The Zacks Oil and Gas Integrated International industry covers companies primarily involved in upstream, midstream and downstream operations. These companies have upstream businesses in the United States (including prolific shale plays and the deepwater Gulf of Mexico), Asia, South America, Africa, Australia and Europe. Midstream operations of energy companies entail transporting oil, natural gas liquids and refined petroleum products.
In downstream businesses, the firms buy raw crude to produce refined petroleum products. The companies’ downstream activities involve chemical businesses that manufacture raw materials for plastics. The integrated players are gradually focusing on renewables, leading to the energy transition. The firms aim to lower emissions from operations and cut the carbon intensity of the products sold.
3 Trends Shaping the Future of the Industry
High Oil Prices: The price of West Texas Intermediate (“WTI”) crude is trading higher than the $70-per-barrel mark, still favorable for exploration and production activities. Brent price is also handsome, trading at more than $75 per barrel. Per the U.S. Energy Information Administration, the WTI and Brent spot average prices will be $77.63 per barrel and $82.40, respectively, in 2023, suggesting that the upstream business environment will favor integrated players.
Stable Fee-Based Revenues: Integrated companies’ midstream businesses are relatively less exposed to the volatility in commodity prices. This is because pipeline and storage assets are usually booked by shippers for the long term, securing stable fee-based revenues.
Strong Focus on Lowering Emissions: Integrated players in the industry, with operations spreading across the United States and abroad, have recognized climate change as a serious risk that needs to be addressed. The companies are now focused on reducing greenhouse gas emissions and flaring rates.
Zacks Industry Rank Indicates Bullish Outlook
The Zacks Oil and Gas Integrated International industry is part of the broader Zacks Oil - Energy sector. It carries a Zacks Industry Rank #66, which places it in the top 26% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider, let’s take a look at the industry’s recent stock market performance and valuation picture.
Industry Underperforms Sector and S&P 500
The Zacks Oil and Gas Integrated International industry has underperformed the broader Zacks Oil - Energy sector and the Zacks S&P 500 composite over the past year.
The industry has risen 1.3% over this period, outpacing the S&P 500’s rally of 24.6% and the broader sector’s improvement of 3.0%.
Industry's Current Valuation
Since oil and gas companies are debt-laden, it makes sense to value them based on the Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA) ratio. This is because the valuation metric takes not just equity into account but also the level of debt.
On the basis of the trailing 12-month EV/EBITDA, the industry is currently trading at 3.16X, lower than the S&P 500’s 13.61X. It is also below the sector’s trailing 12-month EV/EBITDA of 3.59X.
Over the past five years, the industry has traded as high as 6.07X and as low as 2.57X, with a median of 4.46X.
3 Integrated International Stocks Moving Ahead of the Pack
BP: The British energy giant plans to become a net-zero emissions player by 2050 or earlier. The integrated company intends to invest and create its renewable energy generation capacity of 20 gigawatts by 2025. The company, currently carrying a Zacks Rank #3 (Hold), has solid upstream and downstream activities. BP also has a strong focus on reducing its debt load and has been returning capital to shareholders through buybacks and growing dividends.
Chevron: It is also a leading integrated energy player with operations across the world. Apart from a strong balance sheet, it has a solid capital discipline that will help it tide over volatile commodity prices. The energy major’s conservative capital spending will probably help CVX generate considerable cash flow, even in an unstable business scenario. The primary growth driver for the #3 Ranked stock, at least in the near term, is its low-cost Permian projects. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ExxonMobil: It is among the largest integrated energy companies in the world. The energy major can rely on its strong balance sheet to withstand any business turmoil. ExxonMobil, with a Zacks Rank of 3, is banking on low-cost project pipelines centered around the Permian — the most prolific basin in the United States — and offshore Guyana resources.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
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BP p.l.c. (BP) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-14
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CVX
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Below is Validea's guru fundamental report for CHEVRON CORPORATION (CVX). Of the 22 guru strategies we follow, CVX rates highest using our Price/Sales Investor model based on the published strategy of Kenneth Fisher. This value strategy rewards stocks with low P/S ratios, long-term profit growth, strong free cash flow and consistent profit margins.
CHEVRON CORPORATION (CVX) is a large-cap value stock in the Oil & Gas Operations industry. The rating using this strategy is 90% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
PRICE/SALES RATIO: PASS
TOTAL DEBT/EQUITY RATIO: PASS
PRICE/RESEARCH RATIO: PASS
PRICE/SALES RATIO: FAIL
LONG-TERM EPS GROWTH RATE: PASS
FREE CASH PER SHARE: PASS
THREE YEAR AVERAGE NET PROFIT MARGIN: PASS
Detailed Analysis of CHEVRON CORPORATION
CVX Guru Analysis
CVX Fundamental Analysis
More Information on Kenneth Fisher
Kenneth Fisher Portfolio
About Kenneth Fisher: The son of Philip Fisher, who is considered the "Father of Growth Investing", Kenneth Fisher is a money manager, bestselling author, and longtime Forbes columnist. The younger Fisher wowed Wall Street in the mid-1980s when his book Super Stocks first popularized the idea of using the price/sales ratio (PSR) as a means of identifying attractive stocks. According to his alma mater, Humboldt State University, Fisher is also one of the world's foremost experts on 19th century logging. Appropriately, Fisher's firm, Fisher Investments, is located in a lush forest preserve in Woodside, California, where the contrarian-minded Fisher says he and his employees can get away from Wall Street groupthink.
Additional Research Links
Top Energy Stocks
Dividend Aristocrats2023
Wide Moat Stocks2023
Cheapest Value Stocks2023
Factor-Based Stock Portfolios
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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CVX
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On December 13, 2023 at 14:46:09 ET an unusually large $13,897.50K block of Put contracts in Chevron (CVX) was sold, with a strike price of $160.00 / share, expiring in 37 day(s) (on January 19, 2024). Fintel tracks all large options trades, and the premium spent on this trade was 6.14 sigmas above the mean, placing it in the 100.00th percentile of all recent large trades made in CVX options.
This trade was first picked up on Fintel's real time Options Flow tool, where unusual option trades are highlighted.
What is the Fund Sentiment?
There are 4646 funds or institutions reporting positions in Chevron. This is an increase of 149 owner(s) or 3.31% in the last quarter. Average portfolio weight of all funds dedicated to CVX is 0.86%, an increase of 6.11%. Total shares owned by institutions increased in the last three months by 3.06% to 1,472,595K shares.
The put/call ratio of CVX is 0.82, indicating a bullish outlook.
For more in-depth coverage of Chevron, view the free, crowd-sourced company research report on Finpedia.
Analyst Price Forecast Suggests 29.71% Upside
As of November 27, 2023, the average one-year price target for Chevron is 184.84. The forecasts range from a low of 161.60 to a high of $210.00. The average price target represents an increase of 29.71% from its latest reported closing price of 142.50.
See our leaderboard of companies with the largest price target upside.
The projected annual revenue for Chevron is 212,981MM, an increase of 5.07%. The projected annual non-GAAP EPS is 17.00.
What are Other Shareholders Doing?
Berkshire Hathaway holds 110,248K shares representing 5.86% ownership of the company. In it's prior filing, the firm reported owning 123,120K shares, representing a decrease of 11.68%. The firm increased its portfolio allocation in CVX by 6.66% over the last quarter.
VTSMX - Vanguard Total Stock Market Index Fund Investor Shares holds 55,249K shares representing 2.94% ownership of the company. In it's prior filing, the firm reported owning 56,118K shares, representing a decrease of 1.57%. The firm increased its portfolio allocation in CVX by 9.51% over the last quarter.
XLE - The Energy Select Sector SPDR Fund holds 43,300K shares representing 2.30% ownership of the company. In it's prior filing, the firm reported owning 41,022K shares, representing an increase of 5.26%. The firm decreased its portfolio allocation in CVX by 3.26% over the last quarter.
VFINX - Vanguard 500 Index Fund Investor Shares holds 42,637K shares representing 2.27% ownership of the company. In it's prior filing, the firm reported owning 41,493K shares, representing an increase of 2.68%. The firm increased its portfolio allocation in CVX by 12.75% over the last quarter.
Geode Capital Management holds 33,805K shares representing 1.80% ownership of the company. In it's prior filing, the firm reported owning 32,558K shares, representing an increase of 3.69%. The firm increased its portfolio allocation in CVX by 12.85% over the last quarter.
Chevron Declares $1.51 Dividend
On October 27, 2023 the company declared a regular quarterly dividend of $1.51 per share ($6.04 annualized). Shareholders of record as of November 17, 2023 received the payment on December 11, 2023. Previously, the company paid $1.51 per share.
At the current share price of $142.50 / share, the stock's dividend yield is 4.24%.
Looking back five years and taking a sample every week, the average dividend yield has been 4.50%, the lowest has been 3.04%, and the highest has been 9.52%. The standard deviation of yields is 1.05 (n=236).
The current dividend yield is 0.25 standard deviations below the historical average.
Additionally, the company's dividend payout ratio is 0.45. The payout ratio tells us how much of a company's income is paid out in dividends. A payout ratio of one (1.0) means 100% of the company's income is paid in a dividend. A payout ratio greater than one means the company is dipping into savings in order to maintain its dividend - not a healthy situation. Companies with few growth prospects are expected to pay out most of their income in dividends, which typically means a payout ratio between 0.5 and 1.0. Companies with good growth prospects are expected to retain some earnings in order to invest in those growth prospects, which translates to a payout ratio of zero to 0.5.
The company's 3-Year dividend growth rate is 0.17%, demonstrating that it has increased its dividend over time.
Chevron Background Information
(This description is provided by the company.)
Chevron Corporation is one of the world's leading integrated energy companies. Through its subsidiaries that conduct business worldwide, the company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemicals and additives; generates power; and develops and deploys technologies that enhance business value in every aspect of the company's operations. Chevron is based in San Ramon, California.
Fintel is one of the most comprehensive investing research platforms available to individual investors, traders, financial advisors, and small hedge funds.
Our data covers the world, and includes fundamentals, analyst reports, ownership data and fund sentiment, options sentiment, insider trading, options flow, unusual options trades, and much more. Additionally, our exclusive stock picks are powered by advanced, backtested quantitative models for improved profits.
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This story originally appeared on Fintel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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CVX
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By Marta Nogueira and Rodrigo Viga Gaier
RIO DE JANEIRO, Dec 13 (Reuters) - Oil companies including Elysian along with veterans Petrobras and Chevron snapped up the most blocks up for grabs in Brazil's latest offshore oil auction marked by climate protests, as the South American nation looks to replenish reserves with new discoveries.
Oil regulator ANP ran the tender that assigned 192 exploration and production areas out of more than 600 on offer, with newcomer Elysian winning 122 of them.
The government will receive nearly 500 million reais ($102 million) from the blocks auctioned, mostly from contracts for areas in the deep water Pelotas Basin along Brazil's southern coast.
State-run Petrobras PETR4.SA secured 29 blocks in the deep water basin, all as operator with consortium partner Shell SHEL.L. In three of them, China's state-owned CNOOC SASACY.UL also formed part of the winning group.
"We achieved a very successful strategy... We entered a border area with little probability of having environmental problems," said Petrobras CEO Jean Paul Prates, describing the area as "very prolific."
U.S. major Chevron CVX.N also won rights in 15 blocks in the same basin.
Elysian is based in Minas Gerais state and was created only in August to compete in the auction. Its winning bids stretched across three other offshore basins - Potiguar, Espirito Santo and Sergipe Alagoas.
Outside the Rio de Janeiro hotel where the auction took place, climate activists loudly protested the push to keep pumping more fossil fuels, linked by scientists to catastrophic global warming, demanding an immediate transition to clean energy.
"The signals that the Brazilian government is sending to the international community with an oil auction a day after the (the global climate meetings in Dubai) are the worst possible," said Marcelo Laterman, coordinator of Greenpeace's Oceans Front.
In his opening speech, ANP head Rodolfo Saboia acknowledged the auction may seem like a contradiction, but he argued the world's dependence on fossil fuels will not be eliminated in five or ten years.
He added that new oil and gas exploration is needed to avoid falling oil production over the next decade.
Brazil is Latin America's top crude oil producer, followed by Mexico, Colombia and Venezuela.
In the offshore Santos Basin, Karoon KAR.AX won a pair of blocks, while CNOOC and Norway's Equinor won the other two alone.
Five more blocks in Brazil's pre-salt offshore areas were also auctioned under a sharing regime, with BP BP.L winning the rights for the only one that received bids in the Santos Basin.
($1 = 4.9256 reais)
(Reporting by Marta Nogueira and Rodrigo Viga Gaier; Writing by Peter Frontini; Editing by Jonathan Oatis, Leslie Adler and Josie Kao)
((david.aliregarcia@thomsonreuters.com; +52 55 5282 7151; Reuters Messaging: david.aliregarcia.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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CVX
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TotalEnergies TTE announced that it acquired a few startups to boost its Electrical Business operations.
The company acquired three start-ups that have benefited from its TotalEnergies On acceleration program. It also acquired a controlling interest in Time2plug (56% stake) to facilitate and accelerate the deployment of electric vehicle (“EV”) charging points in France for its small B2B customers.
How These Acquisitions Will Assist TTE
TotalEnergies’ long-term goal is to build a portfolio of low-carbon businesses that could account for 15-20% of its sales by 2040.
With the acquisition of Dsflow, TotalEnergies will provide its multi-site, electricity-intensive B2B customers with an innovative Software-as-a-Service solution to pilot their assets in real-time and optimize their procurement strategy.
Acquisition of NASH Renewables will allow TotalEnergies to utilize the software platform developed by the former to optimize the design and operating parameters of its renewable projects with a design-to-value approach.
The acquisition of Predictive Layer will allow TotalEnergies to benefit from the former’s machine learning and artificial intelligence solutions, which focus on energy price forecasting on both physical and derivatives markets, as well as other tailor-made forecast modeling of demand, supply, production or non-commodity trading.
The acquisition of these startups, which specialize in different areas, will assist TotalEnergies in further expanding its electrical business across the globe.
TotalEnergies has already decided on its long-term renewable energy goal of generating more than 100 terawatt hours of clean energy by 2030. The company will make substantial investments each year in its renewable business to expand operations globally.
Renewables to Play a Crucial Part in Energy Mix
Per the International Energy Agency report, by 2030, renewable energy will supply 50% of the world's electricity needs, up from about 30% at the current levels. A global tilt toward clean energy sources is evident, which creates opportunities for companies in the clean energy generation business.
TotalEnergies has been making efforts to cut emissions and add more clean energy generation assets to its portfolio. Given the substantial growth opportunity in this space, other oil and gas companies like ExxonMobil Corporation XOM, BP plc BP and Chevron Corporation CVX are also adopting measures to reduce emissions from operations.
To meet the growing demand for clean fuels, ExxonMobil has been working to reduce emissions by developing more efficient fuels. The company intends to make large investments in emission-reduction projects over the next few years. XOM has developed an ambitious roadmap to achieve net-zero Scope 1 and net-zero Scope 2 GHG emissions by 2030 for unconventionally operated assets.
BP has established an ambitious energy transition strategy to take advantage of the growing demand for sustainable energy. The company plans to develop nearly 50 gigawatt (GW) by 2030 of net renewable generating capacity globally, up from 3.3 GW in 2021.
CVX is making efforts to lower methane emissions. The company has adopted an upstream methane-intensity target of 2.0 kg CO2e/boe by 2028, which represents a 57% reduction from its 2016 baseline. It has reduced its methane intensity by more than 50% and is actively making efforts to end routine flaring by 2030.
Price Performance
Over the past six months, shares of TTE have risen 13.9% compared with the industry’s growth of 12.6%.
Image Source: Zacks Investment Research
Zacks Rank
TotalEnergies currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
BP p.l.c. (BP) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
TotalEnergies SE Sponsored ADR (TTE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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CVX
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
As 2023 comes to an end, many investors are breathing a little easier about their portfolios. As you start to do your year-end rebalancing you may be looking for stocks to buy for 2024. But first let’s look at the state of play.
The strong November rally did more than push the major indexes off their 52-week lows. It also started to spread beyond the tech sector. That doesn’t mean tech stocks didn’t do well. That was particularly true of companies that showed they were monetizing artificial intelligence (AI) – I see you Nvidia (NASDAQ:NVDA).
That being said, there were some stocks that not only haven’t participated in the market rally but look to be downright oversold. To be fair, there’s a reason why investors may have wanted to steer clear of these stocks. Looking ahead to 2024, each one is projected to show solid earnings growth which is the best predictor of stock price growth.
Before you go away for the holidays, you should take a closer look at these stocks that may be primed to get off the mat in 2024.
Chevron (CVX)
Source: Jeff Whyte / Shutterstock.com
Markets can be a funny thing. The energy sector was up when many stocks were falling by 10% or more. But once the calendar hit November, the growth in stocks like Chevron (NYSE:CVX) went into reverse.
With only a few weeks left in 2024, Chevron is trading near its 52-week low in solidarity with the price of crude oil which recently fell below $70 a barrel. Some analysts (including yours truly) thought that $80 would be a floor for oil.
While Chevron is not the only oil stock being impacted by a lower oil price, some investors are concerned about the company’s all-stock purchase of Hess (NYSE:HESS). In addition to questioning how much the acquisition will help Chevron, investors are concerned about the timing of the deal in a falling oil environment.
The deal is expected to close in the first half of the year. By the time it does, it’s possible that the market will be starting to see interest rates coming down. If that’s the case, then the price of oil will be going up, and that’s why CVX belongs on a list of stocks to buy for 2024.
In Chevron’s most recent quarterly earnings it missed badly on the bottom line. Nevertheless, analysts are projecting a 26% increase in CVX stock. And with Chevron, you’re getting one of the most solid dividends in the oil sector. That dividend currently has a 4.24% yield and pays out $6.04 per share on an annual basis. Chevron management has pledged this will go up once the deal with Hess goes through.
Pfizer (PFE)
Source: photobyphm / Shutterstock.com
Pfizer (NYSE:PFE) is next on this list of stocks to buy for 2024. I’m not sure if “sleepy” describes PFE stock. It’s down 44% in 2023 and if it was supposed to rally with other stocks in November, it didn’t get the memo.
The reason for the stock’s slump is clear. After two years of record revenue and earnings due to its COVID-19 vaccines and therapeutics, demand has normalized and the company doesn’t have new drugs to pick up the slack yet.
Like Chevron, some investors are concerned about Pfizer’s proposed acquisition of Seagen (NASDAQ:SGEN) for $43 billion. However, having access to Seagen’s oncology portfolio will be a net positive for Pfizer and its shareholders.
The optimism for PFE stock in 2024 comes down to a robust pipeline that includes 18 new products that may be approved in the first half of 2024. By 2030, Pfizer expects those treatments to deliver over $20 billion.
Analysts project Pfizer stock growing by 50% in 2024. And while investors wait they’re collecting an attractive dividend that has a juicy yield above 6%.
Enphase Energy (ENPH)
Source: T. Schneider / Shutterstock.com
By way of full disclosure, I had a position in Enphase Energy (NASDAQ:ENPH) earlier this year. In fact, I sold the stock and tried again. Maybe the third time will be the charm.
The common objection by investors is that the company’s revenue and earnings are falling at a time when the solar sector is in a sector-wide slump. The solar revolution has been difficult to pull off in an environment of high inflation and rising interest rates.
But when the market picks up, Enphase has a considerable market share in a sector where it won’t be easy for competitors to eat away at that market. At that same time, the government subsidies will still be in place which will further spur demand.
Earnings for the full year 2023 will be lower than in 2022. But after that, there should be a strong recovery. Analysts are projecting a 71% increase in the ENPH stock price in the next 12 months.
On the date of publication, Chris Markoch had a LONG position in CVX. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.
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The post 3 Sleepy Stocks Ready to Wake up in 2024 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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CVX
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By Shariq Khan and David French
Dec 13 (Reuters) - U.S. natural gas producer EQT Corp EQT.N is exploring a sale of a portfolio of minority stakes in wells in Pennsylvania's Marcellus shale formation, which could be worth more than $3 billion, people familiar with the matter said on Wednesday.
EQT is working with an investment bank to auction the stakes, known in the energy industry as "non-operating" interests, the sources said. Non-operating positions give holders a cut from the hydrocarbons sold without taking charge of drilling or other operations, although they must contribute their share of costs.
The stakes EQT is planning to sell are in assets spread across Northeast Pennsylvania with current production of around 700 million cubic feet per day, the sources said. Chesapeake Energy CHK.O operates the assets, with EQT holding a 25% non-operating interest and other parties also owning small holdings, they added.
The sources cautioned a sale is not guaranteed and spoke on condition of anonymity to discuss confidential information.
EQT declined to comment.
EQT's attempt to exit the position, a bulk of which it assumed as part of its $3 billion takeover of Alta Resources in 2021, comes as the company tries to accelerate cutting its $5.9 billion debt pile and boost shareholder returns.
Consolidation in the energy sector has soared in recent months, with U.S. oil majors Exxon MobilXOM.N and ChevronCVX.N announcing takeovers worth over $100 billion combined in just the past two months.
Dealmaking involving natural gas companies has been more subdued, as weak U.S. demand kept commodity prices lower and, in turn, dragged down confidence to pursue acquisitions. But analysts expect a pickup in dealflow next year as rising export demand boosts valuations in the sector.
Chesapeake Energy has approached rival gas producer Southwestern Energy SWN.N about a potential acquisition, Reuters reported in October, a deal that would displace EQT as the top U.S. natural gas producer.
(Reporting by Shariq Khan in Bengaluru and David French in New York;Editing by Elaine Hardcastle)
((davidj.french@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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CVX
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Chevron (CVX) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this oil company have returned -1.8% over the past month versus the Zacks S&P 500 composite's +5.4% change. The Zacks Oil and Gas - Integrated - International industry, to which Chevron belongs, has lost 1.9% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate Revisions
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Chevron is expected to post earnings of $3.60 per share for the current quarter, representing a year-over-year change of -12%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.9%.
The consensus earnings estimate of $13.27 for the current fiscal year indicates a year-over-year change of -29.5%. This estimate has changed -2.3% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $15.28 indicates a change of +15.1% from what Chevron is expected to report a year ago. Over the past month, the estimate has changed +2.2%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Chevron is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Chevron, the consensus sales estimate for the current quarter of $54.87 billion indicates a year-over-year change of -2.8%. For the current and next fiscal years, $208.64 billion and $226.05 billion estimates indicate -15.3% and +8.4% changes, respectively.
Last Reported Results and Surprise History
Chevron reported revenues of $54.08 billion in the last reported quarter, representing a year-over-year change of -18.9%. EPS of $3.05 for the same period compares with $5.56 a year ago.
Compared to the Zacks Consensus Estimate of $54 billion, the reported revenues represent a surprise of +0.15%. The EPS surprise was -17.12%.
Over the last four quarters, Chevron surpassed consensus EPS estimates two times. The company topped consensus revenue estimates three times over this period.
Valuation
Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Chevron is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom Line
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Chevron. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Chevron Corporation (CVX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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CVX
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Below is Validea's guru fundamental report for CHEVRON CORPORATION (CVX). Of the 22 guru strategies we follow, CVX rates highest using our Price/Sales Investor model based on the published strategy of Kenneth Fisher. This value strategy rewards stocks with low P/S ratios, long-term profit growth, strong free cash flow and consistent profit margins.
CHEVRON CORPORATION (CVX) is a large-cap value stock in the Oil & Gas Operations industry. The rating using this strategy is 90% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
PRICE/SALES RATIO: PASS
TOTAL DEBT/EQUITY RATIO: PASS
PRICE/RESEARCH RATIO: PASS
PRICE/SALES RATIO: FAIL
LONG-TERM EPS GROWTH RATE: PASS
FREE CASH PER SHARE: PASS
THREE YEAR AVERAGE NET PROFIT MARGIN: PASS
Detailed Analysis of CHEVRON CORPORATION
CVX Guru Analysis
CVX Fundamental Analysis
More Information on Kenneth Fisher
Kenneth Fisher Portfolio
About Kenneth Fisher: The son of Philip Fisher, who is considered the "Father of Growth Investing", Kenneth Fisher is a money manager, bestselling author, and longtime Forbes columnist. The younger Fisher wowed Wall Street in the mid-1980s when his book Super Stocks first popularized the idea of using the price/sales ratio (PSR) as a means of identifying attractive stocks. According to his alma mater, Humboldt State University, Fisher is also one of the world's foremost experts on 19th century logging. Appropriately, Fisher's firm, Fisher Investments, is located in a lush forest preserve in Woodside, California, where the contrarian-minded Fisher says he and his employees can get away from Wall Street groupthink.
Additional Research Links
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About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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CVX
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It was yet another week when both oil and natural gas prices posted losses.
The headlines revolved around energy producer Occidental Petroleum’s OXY $12 billion deal to acquire Texas shale driller CrownRock LP and American biggie ExxonMobil’s XOM five-year corporate plan. Developments associated with Chevron CVX, Phillips 66 PSX and Hess Corporation HES also grabbed attention.
Overall, it was a bearish seven-day period for the sector. West Texas Intermediate (WTI) crude futures decreased around 3.8% to close at $71.23 per barrel, while natural gas prices moved down 8.3% to end at $2.581 per million British thermal units (MMBtu).
The crude price action remained negative for the seventh week running on demand concerns after government data showed record-high production. Even the OPEC+ announcement of nearly 2 million barrels per day of additional production cuts was unable to shore up oil prices as the market looked for stronger commitments.
Meanwhile, natural gas slumped to a three-and-a-half-month low, overwhelmed by high production and insipid weather-related demand.
Recap of the Week’s Most Important Stories
1. Houston, TX-based energy company Occidental Petroleum has entered into a purchase agreement to acquire Midland-based oil and gas producer CrownRock L.P. The buyout will take place in a cash and stock deal worth approximately $12 billion, including the assumption of CrownRock’s outstanding debt.
Occidental plans to fund the acquisition by taking on $9.1 billion in new debt, issuing about $1.7 billion in common stock and taking over CrownRock's $1.2 billion in outstanding debt. With the fulfillment of normal closing requirements and the acquisition of regulatory clearances, the deal is expected to close in the first quarter of 2024.
This agreement enhances Occidental’s premier Permian portfolio with the addition of 170,000 barrels of oil equivalent per day (Mboed) of high-margin, lower-decline unconventional production and about 1,700 undeveloped sites in 2024. On a diluted share basis, higher free cash flow is anticipated, with $1 billion in the first year based on $70 per barrel WTI. (Occidental to Buy CrownRock in a $12B Cash & Stock Deal)
2. U.S. supermajor ExxonMobil expects a substantial rise in its earnings potential through 2027, with upstream earnings projected to more than double from the 2019 reported level. The outlook is underpinned by robust production growth in the Permian Basin and Guyana.
XOM mentioned that effective implementation of its strategic initiatives since 2019 enhanced its earnings capacity, contributing about $10 billion to its annual earnings and cash flow at a real Brent price of $60 per barrel. The company is progressing toward achieving an additional $14 billion in earnings and cash flow growth potential over the next four years.
The company predicts a production increase to 3.8 million barrels of oil equivalent per day (Boe/d) in 2024, up from this year’s 3.7 million Boe/d, as it places its confidence in growth from the Permian shale basin and Guyana. OM indicated that it anticipates maintaining a flat production until the end of this year, standing at 3.7 million Boe/d primarily due to its withdrawal from Russia. (ExxonMobil Expects Raised Earnings & Oil Production)
3. Small rival Chevron recently outlined its planned capital expenditure for 2024, focusing on strategic investments in both traditional and new energy sectors. The company expects to spend between $15.5 billion and $16.5 billion on capital projects for its consolidated subsidiaries, with an additional $3 billion allocated for affiliate ventures. This announcement not only signifies a financial plan but also serves as a roadmap for Chevron's commitment to sustainable growth and innovation.
Chevron's upstream spending for 2024 is poised at an impressive $14 billion, with a significant allocation to the United States. Approximately $6.5 billion is reserved for the development of the Zacks Rank #3 (Hold) company’s U.S. shale and tight portfolio. Within this, a noteworthy $5 billion is dedicated to the Permian Basin development, showcasing Chevron's commitment to harnessing the potential of this prolific resource.
You can see the complete list of today’s Zacks #1 Rank stocks here.
A substantial 25% of U.S. upstream Capex is reserved for projects in the Gulf of Mexico. Among these, the Anchor project stands out with an objective to achieve its first oil in 2024. Chevron's strategic investments in this region underscore its dedication to diversification and tapping into diverse energy sources. (Chevron Raises 2024 Capex, Eyes Lower Carbon Future)
4. Phillips 66 disclosed a 2024 capital budget of $2.2 billion, with $923 million allocated to sustaining capital and $1.3 billion for growth capital. The figure is lower than the downstream operator’s projected capital spending for 2023, which is estimated at $2.5 billion. The budget aligns with PSX’s strategic goal of returning $13-$15 billion to shareholders by the end of 2024.
The sustaining capital budget incorporates $300 million in efficiencies achieved through the company’s business transformation initiatives. Before the business transformation, Phillips 66 historically spent an average of $1 billion per year on sustaining capital. With the inclusion of DCP Midstream consolidation, an additional $200 million in sustaining capital is accounted for.
Phillips 66 intends to allocate $1.1 billion in Refining, with $412 million allocated for sustaining capital. The Refining growth capital of $654 million encompasses the completion of the San Francisco Refinery conversion in Rodeo, transforming it into one of the world’s largest renewable fuels facilities. The capital budget includes initiatives aimed at enhancing the refining performance. (Phillips 66 Announces $2.2B Capital Expenditure for 2024).
5. Chevron and Hess disclosed that they have received a request for additional information from the Federal Trade Commission (FTC) concerning the former’s planned $53 billion deal to acquire the upstream explorer. This disclosure, found in an 8-K filing, underscores the heightened regulatory scrutiny surrounding major business transactions.
The companies have pledged to respond promptly to the second request, emphasizing their commitment to working cooperatively with the FTC throughout the review process. It's worth noting that the Hart-Scott-Rodino waiting period is now extended until 30 days after both CVX and HES have substantially complied with this additional request.
As CVX and HES navigate the intricate web of regulatory requirements, transparency and cooperation with the FTC emerge as the cornerstones of a successful merger. The companies are positioned to demonstrate not only the strategic benefits of the deal but also their commitment to adhering to antitrust regulations and fostering a competitive marketplace. (Chevron-Hess' $53B Merger Faces Regulatory Scrutiny).
Price Performance
The following table shows the price movement of some major oil and gas players over the past week and during the last six months.
Company Last Week Last 6 Months
XOM -3.3% -7.2%
CVX -0.3% -9.1%
COP -2.7% +8%
OXY -3.7% -3.8%
SLB -6.4% +3.4%
RIG -10.8% -6.9%
VLO -2.8% +8.9%
MPC -5.5% +27.3%
With oil and gas moving down for the week, stocks were mostly negative. The Energy Select Sector SPDR — a popular way to track energy companies — fell 3.3% last week. But over the past six months, the sector tracker has increased 1.2%.
What’s Next in the Energy World?
As usual, market participants will closely track the regular releases to look for guidance on the direction of the commodities. In this context, the U.S. Government’s statistics on oil and natural gas — one of the few solid indicators that come out regularly — will be on energy traders' radar. Data on rig count from the oilfield service firm Baker Hughes, which is a pointer to the trends in U.S. crude/natural gas production, is closely followed, too.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Chevron Corporation (CVX) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
Hess Corporation (HES) : Free Stock Analysis Report
Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report
Phillips 66 (PSX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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CVX
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Updates throughout with details on regulator's comments
Dec 14 (Reuters) - The Australian competition regulator on Thursday approved Viva Energy's VEA.AX acquisition of convenience store operator On the Run (OTR Group) from Adelaide-based Peregrine Corp for A$1.15 billion ($765.90 million).
The Australian Competition and Consumer Commission's (ACCC) approval comes after a court enforceable undertaking by Viva Energy to divest 25 Coles Express sites in South Australia.
In May this year, Viva completed the acquisition of Coles Express convenience stores, strengthening its footprint nationwide compared to its rival Ampol Ltd ALD.AX.
The ACCC's review focused on areas in which the OTR Group and Viva's operations overlapped, which was predominantly in South Australia and the Northern Territory.
The regulator was concerned Viva's acquisition of OTR Group "would combine the largest retail fuel network in South Australia with Viva Energy's retail network", providing Viva Energy with an extended network significantly larger than its next largest rival.
To alleviate the concerns, Viva Energy will sell 25 Coles Express sites in South Australia to Chevron CVX.N, which the regulator has approved.
In exchange, Viva Energy will receive 13 Chevron sites located in Queensland, New South Wales and Western Australia, the regulator said.
"The ACCC considers that the undertaking given by Viva Energy will create a viable, effective, standalone, independent and long-term competitor," ACCC Commissioner Stephen Ridgeway said.
($1 = 1.5015 Australian dollars)
(Reporting by Sameer Manekar in Bengaluru; Editing by Krishna Chandra Eluri)
((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-12
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CVX
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Volatility is back down at very low levels, with the VIX Index closing at 12.63 yesterday. When volatility is low, options become cheaper, so today we’re taking a look at the Long Straddle Screener.
A long straddle is an advanced options strategy used when a trader is seeking to profit from a big move in either direction and / or an increase in implied volatility.
To execute the strategy, a trader would buy a call and a put with the following conditions:
Both options must use the same underlying stock
Both options must have the same expiration
Both options must have the same strike price
Since it involves having to buy both a call and a put, the trader must pay two premiums up-front, which also happens to be the maximum possible loss.
The potential profit is theoretically unlimited, although the trade will lose money each day through time decay if a big move does not occur.
The position means you will start with a net debit and only profit when the underlying stock rises above the upper break-even point or falls below the lower break-even point.
Profits can be made with a smaller price move if the move happens early in the trade.
Let’s take a look at Barchart’s Long Straddle Screener for December 12th. I have added a filer for Market Cap above 40b and total call volume above 2,000.
The screener shows some interesting long straddle trades on popular stocks such as CVX, XOM, AAPL, CSCO, PFE, MSFT, OXY and BAC. Let’s walk through a couple of examples.
CVX Long Straddle Example
Let’s take a look at the first line item – a long straddle on CVX.
Using the January 19th expiry, the trade would involve buying the $145-strike call and the $145-strike put. The premium paid for the trade would be $800, which is also the maximum loss. The maximum profit is theoretically unlimited. The lower breakeven price is $137 and the upper breakeven price is $153.
The premium paid is equal to 5.54% of the stock price and the probability of success is estimated at 44.1%.
The Barchart Technical Opinion rating is an 88% Sell with an Average short term outlook on maintaining the current direction.
Long term indicators fully support a continuation of the trend.
Implied volatility is currently 21.48% compared to a twelve-month low of 17.34% and a high of 35.64%.
AAPL Long Straddle Example
Let’s take a look at the third line item – a long straddle on AAPL.
Using the January 19th expiry, the trade would involve buying the $195 strike call and the $195 strike put. The premium paid for the trade would be $845, which is also the maximum loss. The maximum profit is theoretically unlimited. The lower breakeven price is $186.55 and the upper breakeven price is $203.45.
The premium paid is equal to 4.37% of the stock price and the probability of success is estimated at 43.9%.
The Barchart Technical Opinion rating is an 88% Buy with an Average short term outlook on maintaining the current direction.
Long term indicators fully support a continuation of the trend.
Implied volatility is currently 16.93% compared to a twelve-month low of 15.80% and a high of 42.79%.
CSCO Long Straddle Example
Let’s take a look at one final straddle, a long straddle on CSCO.
Using the March 15th expiry, the trade would involve buying the $50 strike call and the $50 strike put. The premium paid for the trade would be $417, which is also the maximum loss. The maximum profit is theoretically unlimited. The lower breakeven price is $45.83 and the upper breakeven price is $54.17.
The premium paid is equal to 8.44% of the stock price and the probability of success is estimated at 43.8%.
The Barchart Technical Opinion rating is a 56% Sell with a Weakening short term outlook on maintaining the current direction.
Implied volatility is currently 16.15% compared to a twelve-month low of 13.70% and a high of 34.15%.
Mitigating Risk
Long straddles can lose money fairly quickly if the stock stay flat, and / or if implied volatility drops.
Position sizing is important so that a large loss does not cause more than a 1-2% loss in total portfolio value. Another good rule of thumb is a 20-30% stop loss.
Please remember that options are risky, and investors can lose 100% of their investment. This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.
More Stock Market News from Barchart
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On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-12
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CVX
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Despite volatilities and uncertainties affecting the energy market, oil prices are highly favorable for upstream businesses. Integrated energy players’ midstream businesses are also sound since the companies generate stable fee-based revenues from pipeline and storage assets, thereby enhancing the outlook for the Zacks Oil and Gas Integrated Internationalindustry.
Among the frontrunners in the industry that will possibly make the most of the handsome business scenario are Exxon Mobil Corporation XOM, Chevron Corporation CVX and BP plc BP.
About the Industry
The Zacks Oil and Gas Integrated International industry covers companies primarily involved in upstream, midstream and downstream operations. These companies have upstream businesses in the United States (including prolific shale plays and the deepwater Gulf of Mexico), Asia, South America, Africa, Australia and Europe. Midstream operations of energy companies entail transporting oil, natural gas liquids and refined petroleum products. In downstream businesses, the firms buy raw crude to produce refined petroleum products. The companies’ downstream activities involve chemical businesses that manufacture raw materials for plastics. The integrated players are gradually focusing on renewables, leading to the energy transition. The firms aim to lower emissions from operations and cut the carbon intensity of the products sold.
3 Trends Shaping the Future of the Industry
High Oil Prices: The price of West Texas Intermediate (“WTI”) crude is trading higher than the $70-per-barrel mark, still favorable for exploration and production activities. Brent price is also handsome, trading at more than $75 per barrel. Per the U.S. Energy Information Administration, the WTI and Brent spot average prices will be $77.63 per barrel and $82.40, respectively, in 2023, suggesting that the upstream business environment will favor integrated players.
Stable Fee-Based Revenues: Integrated companies’ midstream businesses are relatively less exposed to the volatility in commodity prices. This is because pipeline and storage assets are usually booked by shippers for the long term, securing stable fee-based revenues.
Strong Focus on Lowering Emissions: Integrated players in the industry, with operations spreading across the United States and abroad, have recognized climate change as a serious risk that needs to be addressed. The companies are now focused on reducing greenhouse gas emissions and flaring rates.
Zacks Industry Rank Indicates Bullish Outlook
The Zacks Oil and Gas Integrated International industry is part of the broader Zacks Oil - Energy sector. It carries a Zacks Industry Rank #66, which places it in the top 26% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider, let’s take a look at the industry’s recent stock market performance and valuation picture.
Industry Underperforms Sector and S&P 500
The Zacks Oil and Gas Integrated International industry has underperformed the broader Zacks Oil - Energy sector and the Zacks S&P 500 composite over the past year.
The industry has risen 1.3% over this period, outpacing the S&P 500’s rally of 24.6% and the broader sector’s improvement of 3.0%.
One-Year Price Performance
Industry's Current Valuation
Since oil and gas companies are debt-laden, it makes sense to value them based on the Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA) ratio. This is because the valuation metric takes not just equity into account but also the level of debt.
On the basis of the trailing 12-month EV/EBITDA, the industry is currently trading at 3.16X, lower than the S&P 500’s 13.61X. It is also below the sector’s trailing 12-month EV/EBITDA of 3.59X.
Over the past five years, the industry has traded as high as 6.07X and as low as 2.57X, with a median of 4.46X.
Trailing 12-Month EV/EBITDA Ratio
3 Integrated International Stocks Moving Ahead of the Pack
BP: The British energy giant plans to become a net-zero emissions player by 2050 or earlier. The integrated company intends to invest and create its renewable energy generation capacity of 20 gigawatts by 2025. The company, currently carrying a Zacks Rank #3 (Hold), has solid upstream and downstream activities. BP also has a strong focus on reducing its debt load and has been returning capital to shareholders through buybacks and growing dividends.
Price and Consensus: BP
Chevron: It is also a leading integrated energy player with operations across the world. Apart from a strong balance sheet, it has a solid capital discipline that will help it tide over volatile commodity prices. The energy major’s conservative capital spending will probably help CVX generate considerable cash flow, even in an unstable business scenario. The primary growth driver for the #3 Ranked stock, at least in the near term, is its low-cost Permian projects. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: CVX
ExxonMobil: It is among the largest integrated energy companies in the world. The energy major can rely on its strong balance sheet to withstand any business turmoil. ExxonMobil, with a Zacks Rank of 3, is banking on low-cost project pipelines centered around the Permian — the most prolific basin in the United States — and offshore Guyana resources.
Price and Consensus: XOM
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
BP p.l.c. (BP) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-12
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CVX
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Below is Validea's guru fundamental report for CHEVRON CORPORATION (CVX). Of the 22 guru strategies we follow, CVX rates highest using our Price/Sales Investor model based on the published strategy of Kenneth Fisher. This value strategy rewards stocks with low P/S ratios, long-term profit growth, strong free cash flow and consistent profit margins.
CHEVRON CORPORATION (CVX) is a large-cap value stock in the Oil & Gas Operations industry. The rating using this strategy is 90% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
PRICE/SALES RATIO: PASS
TOTAL DEBT/EQUITY RATIO: PASS
PRICE/RESEARCH RATIO: PASS
PRICE/SALES RATIO: FAIL
LONG-TERM EPS GROWTH RATE: PASS
FREE CASH PER SHARE: PASS
THREE YEAR AVERAGE NET PROFIT MARGIN: PASS
Detailed Analysis of CHEVRON CORPORATION
CVX Guru Analysis
CVX Fundamental Analysis
More Information on Kenneth Fisher
Kenneth Fisher Portfolio
About Kenneth Fisher: The son of Philip Fisher, who is considered the "Father of Growth Investing", Kenneth Fisher is a money manager, bestselling author, and longtime Forbes columnist. The younger Fisher wowed Wall Street in the mid-1980s when his book Super Stocks first popularized the idea of using the price/sales ratio (PSR) as a means of identifying attractive stocks. According to his alma mater, Humboldt State University, Fisher is also one of the world's foremost experts on 19th century logging. Appropriately, Fisher's firm, Fisher Investments, is located in a lush forest preserve in Woodside, California, where the contrarian-minded Fisher says he and his employees can get away from Wall Street groupthink.
Additional Research Links
Top Energy Stocks
Dividend Aristocrats2023
Wide Moat Stocks2023
Cheapest Value Stocks2023
Factor-Based Stock Portfolios
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-12
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CVX
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By Emily Chow
SINGAPORE, Dec 13 (Reuters) - Australian energy companies Woodside WDS.AX and Santos STO.AXannounced on Dec. 7 they are in preliminary talks to merge, a tie-up that would come amid a wave of consolidation in the global energy sector.
If Woodside swallows up Santos, it would be the largest corporate deal in Australia for several years. The combined entity would become the biggest liquefied natural gas (LNG) producer in Australia, which is the world's No. 2 supplier of the superchilled fuel.
WHAT WOULD THE COMBINED ENTITY LOOK LIKE?
The enlarged Woodside would have a market value of roughly $50 billion and annual production of 260 million barrels of oil equivalent (boe).
LNG would account for 53% of production, while pipeline gas would take up 24% of output. The remaining 23% of output would be crude oil and condensates production, based on the two companies' production in 2022.
With Santos in the fold, Woodside would overtake TotalEnergies TTEF.PA and Malaysia's Petronas to become the world's sixth largest LNG producer, with output at over 16 million metric tons per year.
The LNG powerhouse would rank only behind QatarEnergy, Cheniere Energy LNG.A, Shell SHEL.L, Exxon Mobil XOM.N and Chevron CVX.N, according to estimates from analysts including Bernstein Research, based on 2023 production levels.
The new entity would have assets in Australia, Alaska, the Gulf of Mexico, Senegal, Trinidad and Tobago and Papua New Guinea, with overseas output accounting for nearly a third of combined total production.
WHICH ASSETS COULD BE SOLD?
Analysts say a merged entity would control about 26% of the gas market on Australia's east coast, home to much of the country's population, and 35% in Western Australia, which could draw concern from the country's competition regulator.
The Australian Competition and Consumer Commission (ACCC) said it would consider whether a public merger review into the impact on competition was required if the deal goes ahead.
A source close to the merger talks said the companies could overcome regulatory concerns by selling some smaller domestic assets. Analysts said Santos' Varanus Island asset in Western Australia, and its Cooper Basin gas business on the east coast could be candidates for sale.
Woodside has been looking to sell its stakes in the mature Macedon gas field and Pyrenees oil project off Western Australia, the Australian Financial Review reported. Both of those assets are co-owned by Santos.
WHAT WOULD BE THE IMPACT ON THE GLOBAL LNG MARKET?
With Australia in close proximity to top LNG buyers in northeast Asia, the merged group would have more bargaining power when dealing with buyers, given its bigger portfolio with more delivery options and flexibility from more terminals, analysts said.
The combined group would operate four LNG plants in Australia - North West Shelf, Pluto, Darwin and Gladstone, and have a stake in Chevron-led Wheatstone.
For Woodside the big prize would be major stakes in the two LNG projects in Papua New Guinea - Exxon-led PNG LNG and TotalEnergies-led Papua LNG, which is up for a final investment decision in 2024.
"It will give the new company a greater capacity to invest, but I think the bigger impact will be in creating a larger LNG portfolio player which will be able to challenge the oil majors through multiple LNG export hubs," said Bernstein analyst Neil Beveridge.
Offtakers of LNG from Woodside and Santos projects include Japan's JERA, Tokyo Gas and South Korea's Kogas.
Woodside-Santos merger global ranking chart https://tmsnrt.rs/3uXNrgT
Santos, Woodside share prices https://tmsnrt.rs/3Tars0h
(Reporting by Emily Chow; Editing by Florence Tan and Sonali Paul)
((emily.chow@thomsonreuters.com; Reuters Messaging: emily.chow.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-12
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CVX
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Chevron Corporation’s CVX chief executive officer Mike Wirth expressed optimism on Monday, disregarding the likelihood of a military conflict arising from the ongoing border dispute between Venezuela and Guyana. Despite the recent exchange of hostile statements between the South American nations, Wirth said that armed conflict was unlikely.
Speaking at an event hosted by the Council on Foreign Relations in Washington, he acknowledged the hostile statements made by both Venezuela and Guyana, but remained confident that armed conflict was not the likely outcome. Instead, he highlighted the historical precedence of diplomatic solutions in resolving territorial disputes.
Wirth assured that Chevron is closely monitoring developments in the region. The company, involved in significant energy projects in both Venezuela and Guyana, recognizes the potential impact of geopolitical tensions on its operations. The CEO's comments reflect a measured outlook, acknowledging the gravity of the situation while expressing faith in diplomatic channels to find a resolution.
The border dispute between Venezuela and Guyanahas been a longstanding issue, with both nations staking claims to the Essequibo oil-rich region. Despite the current tension, Wirth's comments reflect a measured and optimistic outlook, suggesting that diplomatic efforts may prevail over military confrontation in addressing territorial disagreement.
Zacks Rank & Key Picks
Chevron currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are Matador Resources Company MTDR, Liberty Energy Inc. LBRT and EOG Resources, Inc. EOG. While Matador Resources sports a Zacks Rank #1 (Strong Buy), both Liberty Energy and EOG Resources carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador Resources is among the leading oil and gas explorers in the shale and unconventional resources in the United States. The company’s prime intention is to create more value for shareholders and generate lucrative returns from the capital invested in unconventional plays.
MTDR’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 13.89%.
Liberty Energy is a North American provider of hydraulic fracturing services to upstream energy operators. The company’s multi-basin presence offers an attractive upside opportunity compared with most of its peers. Its strong relationship with high-quality customers provides revenue visibility and business certainty.
LBRT’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 9.88%.
EOG Resources is an energy exploration and production company with an attractive growth profile, upper-quartile returns and a disciplined management team. With highly productive acreages in premier oil shale plays like the Permian and Eagle Ford, the company has numerous untapped high-quality drilling sites.
EOG’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 9.17%.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
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Chevron Corporation (CVX) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
Matador Resources Company (MTDR) : Free Stock Analysis Report
Liberty Energy Inc. (LBRT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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