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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
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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
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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
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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
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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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2023-12-12
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CVX
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Dividends are a portion of a company’s earnings paid out to shareholders, typically regularly. They are one-way companies reward investors for holding their stock. Dividend stocks are shares in companies that regularly distribute dividends. These stocks are often from well-established, profitable companies with a history of stable earnings.
Investing in dividend stocks offers several advantages. They provide a steady income stream, which can be particularly appealing for long-term investors and those seeking income, like retirees. Dividend stocks are often less volatile than non-dividend-paying stocks. This can make them a safer investment during market downturns. However, there are also disadvantages. High dividend payouts can sometimes indicate a lack of opportunities for a company to reinvest in its growth. This could mean slower capital appreciation of the stock.
Moreover, tax implications of dividend income can vary depending on the investor’s tax situation. It’s essential to consider this when investing in dividend stocks. Also, investors should not overlook a company’s overall financial health just for attractive dividend yields. A well-rounded approach, considering both dividend yield and company fundamentals, is crucial. Considering this, here are two dividend stocks to watch in the stock market today.
Dividend Stocks To Invest In [Or Avoid] Now
Chevron Corporation (NYSE: CVX)
The Procter & Gamble Company (NYSE: PG)
Chevron Corporation (CVX Stock)
Leading off, Chevron Corporation (CVX) is one of the world’s leading integrated energy companies, engaged in every aspect of the oil and natural gas industry. Chevron’s operations range from exploration and production to refining, marketing, and transportation. The company is also involved in chemical manufacturing and power generation. Today, Chevron has an annual dividend yield of 4.21%.
In late October, Chevron announced its Q3 2023 financial results. Diving in, the company posted Q3 2023 earnings of $3.05 per share, with revenue of $54.08 billion. This was compared to analysts’ consensus estimates for the quarter which were an EPS of $3.68 and revenue estimates of $50.24 billion.
Over the last five trading days, shares of CVX stock have started to recover by 1.09%. Meanwhile, during Tuesday’s mid-morning trading session, Chevron stock is trading red on the day by 0.64% so far, trading at $143.47 a share.
[Read More] Best Stocks To Buy In December 2023? 3 Mag 7 Stocks To Watch
The Procter & Gamble Company (PG Stock)
Next, The Procter & Gamble Company (PG) is a multinational consumer goods corporation known for its wide range of personal care, hygiene, and household products. Procter & Gamble, commonly known as P&G, offers brands that have become household names across the globe. Currently, PG shareholders get an annual dividend yield of 2.59%.
Back in October, Procter & Gamble Co. reported its Q1 2024 financial results. In detail, the company reported Q1 2024 earnings of $1.83 per share, on revenue of $21.87 billion. This was versus Wall Street’s estimates for the quarter which were an EPS of $1.71 per share, with revenue estimates of $21.56 billion. Additionally, revenue increased by 6.11% compared to the same period, the previous year.
In the past five trading days, shares of PG stock are trading down modestly by 0.97%. Moreover, during Tuesday’s mid-morning trading session, Procter & Gamble stock is red on the day by 0.19% so far, trading at $145.56 a share.
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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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2023-12-12
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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 iShares Core High Dividend ETF (HDV) is a passively managed exchange traded fund launched on 03/29/2011.
The fund is sponsored by Blackrock. It has amassed assets over $10.22 billion, making it one of the larger 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 4.04%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 21% of the portfolio. Healthcare and Consumer Staples round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM) accounts for about 8.29% of total assets, followed by Johnson & Johnson (JNJ) and Chevron Corp (CVX).
The top 10 holdings account for about 51.53% of total assets under management.
Performance and Risk
HDV seeks to match the performance of the Morningstar Dividend Yield Focus Index before fees and expenses. The Morningstar Dividend Yield Focus Index offers exposure to high quality U.S. domiciled companies that have had strong financial health and an ability to sustain above average dividend payouts.
The ETF has lost about -0.69% so far this year and it's up approximately 0.22% in the last one year (as of 12/12/2023). In the past 52-week period, it has traded between $93.77 and $106.66.
The ETF has a beta of 0.81 and standard deviation of 13.74% for the trailing three-year period, making it a medium risk choice in the space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Core High Dividend 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, HDV 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 $52.72 billion in assets, Vanguard Value ETF has $102.59 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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iShares Core High Dividend ETF (HDV): ETF Research Reports
Chevron Corporation (CVX) : Free Stock Analysis Report
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : 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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2023-12-12
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CVX
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When the S&P 500 is roaring higher and knocking on the door of an all-time high, a few percentage points of dividend yield may not seem that enticing.
However, the real advantage of dividend stocks isn't what they do during a raging bull market, but the security they provide during a bear market. When equity prices are crashing all around you, collecting reliable income without the need to buy stock can provide some extra dry powder to buy the dip on beaten-down growth stocks, or simply act as an income source.
The sweet spot is finding a stock that can deliver both dividend income and compound value over time. Chevron (NYSE: CVX), Procter & Gamble (NYSE: PG), and MSC Industrial Direct (NYSE: MSM) fit that profile. Here's why each stock is worth buying now.
Image source: Getty Images.
With oil prices down, Chevron looks like a buy
Scott Levine (Chevron): Falling fairly steadily from a price per barrel of about $94, benchmark West Texas Intermediate is now priced around $72. And with the fall in energy prices, energy stocks like Chevron have also dipped. The oil supermajor's stock has slipped more than 13% over the past three months as of this writing, meaning investors can pick up Chevron stock, and its attractive 4.2% forward-yielding dividend, at a better price.
Although the sinking energy prices may be disconcerting to potential investors, it's important to remember that energy prices are cyclical, so riding out these declines is part and parcel of being an investor in energy stocks. And while some management teams aren't adept at navigating their businesses through volatility stemming from falling energy prices, let alone maintaining or raising the dividend, Chevron's C-suite has demonstrated sufficient prowess. For 36 consecutive years, Chevron has logged dividend raises, making it one of the elite dividend-paying stocks available to investors.
One of the alluring aspects of Chevron as a dividend stock is that the company often generates sufficient free cash flow from its extensive operations up and down the energy value chain to cover its dividend.
CVX Dividend Per Share (Annual) data by YCharts.
And Chevron's free cash flow, presumably, will remain strong in the years to come, especially in light of the recent acquisition of PDC Energy, an acquisition expected to contribute $1 billion in annual free cash flow.
Shares of Chevron are currently valued at 7.6 times operating cash flow, representing a discount to its five-year average cash flow multiple of 9.4. That makes now a great time to grease the wheels of your passive income machine with Chevron stock.
Take advantage of P&G's down year
Daniel Foelber (Procter & Gamble): P&G has underperformed the market this year. And it could be a buying opportunity.
During a time when many consumer staples companies are seeing falling margins, P&G's margins are less than two percentage points off of an all-time high, while its net income has rebounded to a five-year high.
PG Operating Margin (TTM) data by YCharts
The strong performance, paired with a lagging stock price, has pushed P&G's price to earnings ratio down 23.6 -- which isn't necessarily cheap. But it is below the stocks' three-, five, seven, and 10-year median.
PG PE Ratio data by YCharts
I believe P&G deserves to trade above its historic valuation, not below it. The company has done a uniquely impressive job during this inflationary period by exhibiting unparalleled pricing power when so many of its peers have seen their margins compress or are just now building their margins back up.
2022 and 2023 proved how P&G is the undisputed industry leader across its businesses segments, and it's also demonstrated the advantage it has from a supply chain management perspective.
With 67 consecutive years of dividend raises, P&G is a reliable passive-income stock that also has what it takes to take market share and grow its operations for years to come.
MSC Industrial has long-term growth prospects and an attractive dividend
Lee Samaha (MSC Industrial): Maintenance, repair, and operations (MRO) product distributor MSC Industrial is a play on industrial production growth in the United States. In an era where global trade tensions are growing and the economy continues to suffer from supply chain constraints, many industrial companies have reshoring on their mind.
However, to shift manufacturing back from low-labor-cost countries will require investment in productivity-enhancing technology like automation and smart manufacturing, and it will also need a good-quality, reliable MRO supply to improve productivity.
That's where MSC Industrial's inventory management solutions, same-day shipping of products, e-commerce capability, and growing installed base of vending machines at customer sites come in. Through these initiatives and its focus on metalworking, MSC has generated organic sales growth in excess of industrial production growth in the U.S. over the past few years.
Its earnings have grown in concert, and its quarterly dividend of $0.83 puts the stock on a dividend yield of 3.4% at the current price. According to CFO Kristen Actis-Grande on the last earnings call, MSC targets "modest and consistent increases" in dividends over time.
With Wall Street analysts penciling in earnings per share of $6.14 for 2024, MSC's yearly dividend of $3.32 is well covered. Investors can look forward to long-term growth in earnings and dividends if investment in reshoring is set to grow in the coming decade.
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Daniel Foelber has no position in any of the stocks mentioned. 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 has positions in and recommends MSC Industrial Direct. 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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2023-12-12
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CVX
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Occidental Petroleum Corporation OXY has entered into a purchase agreement to acquire Midland-based oil and gas producer CrownRock L.P., a joint venture between CrownQuest Operating LLC and Lime Rock Partners. 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.
Benefits From Acquisition
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.
Combined with higher cash flow and proceeds from a new divestiture program of $4.5-$6 billion, Occidental will be able to reduce its debt by at least $4.5 billion over the next 12 months.
The agreement will help Occidental build subsurface understanding and offer operational flexibility and growth opportunities. CrownRock's 94,000 net acres of high-quality stacked pay assets and infrastructure are well-positioned alongside Occidental's legacy Midland Basin operations.
The acquisition of assets, which include four recycling plants, should strengthen OXY’s ability to recycle water. The agreement further increases Occidental’s Permian unconventional sub-$40 breakeven inventory by 33%.
The buyout also supports a 22% increase in OXY’s quarterly dividend rate. This results in a quarterly dividend of 22 cents per share compared with the previous rate of 4 cents. The new dividend is expected to be declared in February 2024.
Acquisition-focused Oil & Gas
In August 2023, Occidental announced that it has entered into a definitive purchase agreement to acquire all the outstanding equity of Carbon Engineering Ltd. for a total cash consideration of approximately $1.1 billion. This acquisition is expected to increase shareholders' value through an improved drive for technology innovation and accelerated direct air capture cost reductions.
In August 2019, Occidental had completed its acquisition of Anadarko Petroleum Corporation in a transaction valued at $55 billion, including the assumption of Anadarko's debt. This acquisition has expanded its operations in the Permian Basin and is accretive to free cash flow.
Along with Occidental, some other oil and gas companies like Chevron Corporation CVX and ExxonMobil Corporation XOM are also expanding their operations through acquisitions.
In October 2023, Chevron announced that it will acquire Hess Corporation HES for $53 billion in an all-stock transaction. The deal, which is expected to close in early 2024, is the second-largest oil and gas acquisition to date, following ExxonMobil's acquisition of Pioneer Natural Resources. The acquisition is a major win for Chevron, as it will give the company access to Hess' high-quality assets in Guyana and the Bakken Formation in North Dakota.
CVX’s long-term (three- to five-year) earnings growth rate is 14.27%. The Zacks Consensus Estimate for its 2023 earnings is pegged at $13.35 per share.
In October 2023, ExxonMobil entered into an agreement to acquire Pioneer Natural Resources in an all-stock transaction worth $59.5 billion. The acquisition will position ExxonMobil as the leading producer in the largest U.S. oilfield, ensuring a decade of cost-effective production. The deal is expected to close in early 2024.
XOM’s long-term earnings growth rate is 3%. It delivered an average earnings surprise of 0.6% in the last four quarters.
Price Performance
In the past three months, shares of Occidental have lost 14% compared with the industry’s 10.5% decline.
Image Source: Zacks Investment Research
Zacks Rank
Occidental currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks 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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2023-12-12
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CVX
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Occidental Petroleum (NYSE: OXY) has struck a deal to acquire privately held oil and natural gas producer CrownRock for $12 billion. The deal will bolster its position in the oil-rich Permian Basin. It will also increase the company's cash flow, giving it more fuel to pay dividends.
The deal is the latest in a wave of mergers in the oil patch as Occidental looks to keep pace with larger rivals ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX). However, there's one notable difference between this purchase and the deals made by its peers -- a difference that could haunt the energy company in the future.
Drilling down into the deal
Occidental Petroleum is acquiring CrownRock in a cash-and-stock deal. CrownRock controls more than 94,000 acres in the Midland Basin side of the Permian, where it produces about 170,000 barrels of oil equivalent per day (BOE/d) of high-margin oil. Occidental's management expects the purchase will increase its free cash flow by $1 billion next year, assuming oil averages $70 a barrel, which is right around the current price.
In addition, CrownRock holds 1,700 untapped drilling locations, including 750 that are profitable to drill at sub-$40 oil. This will increase Occidental's sub-$40 drillable inventory by 25%.
The transaction will increase Occidental's scale in the Permian Basin, enabling it to leverage its operations to reduce costs. The combination of all these factors is giving Occidental the fuel and confidence to increase its dividend by 22%.
Following the leaders
This purchase follows the announcements of similar needle-moving deals by ExxonMobil and Chevron. ExxonMobil is acquiring Pioneer Natural Resources for $64.5 billion (including the assumption of debt), while Chevron is buying Hess for $60 billion (including the assumption of its debt). Those oil giants likewise expect their deals to increase their scale, enabling them to produce oil and natural gas more efficiently and cost-effectively. The acquisitions should also enhance their free cash flows over the long term. For example, Chevron expects its Hess acquisition and high-return capital program to more than double its free cash flow by 2027.
The Occidental acquisition is most similar to ExxonMobil's deal. Pioneer Natural Resources is the leading producer in the Permian's Midland Basin (whereas the Hess deal adds the Bakken and Guyana to Chevron's portfolio). That greater scale will give ExxonMobil more opportunities to leverage technology to become an even more efficient operator, which should reduce costs. Occidental should see similar benefits from its scale-enhancing acquisition of CrownRock.
Levering up again
There's one key difference between these megadeals.
ExxonMobil and Chevron are both making all-stock acquisitions. The only debt they're taking on is what they're assuming from the acquired companies (which is 8% of the total value of ExxonMobil's deal and 12% of Chevron's transaction value).
Occidental's deal has a completely different financing structure. It's only using $1.7 billion of stock to fund its $12 billion deal. To fund the rest, it's issuing $9.1 billion of new debt and assuming $1.2 billion of CrownRock's existing debt. In short, it's taking on debt to fund 86% of the transaction's value.
However, Occidental does plan to pay off the bulk of this debt quickly. Along with the increased free cash flow from the deal, it's planning to launch a new asset sale program to raise between $4.5 billion and $6 billion in cash. That should enable Occidental to repay at least $4.5 billion of the debt it's taking on in the deal within the next year.
The strategy is eerily similar to Occidental's funding plan in 2019 when it beat out Chevron to buy Anadarko Petroleum for $55 billion. The company struck a side deal with TotalEnergies to sell $8.8 billion of Anadarko's assets, which was part of its plan to sell between $10 billion and $15 billion of assets over 24 months. Those proceeds, along with free cash flow and expected deal synergies, were part of its plan to pay off a large portion of the debt it took on to acquire Anadarko.
Unfortunately, that strategy didn't work out as well as planned. Government regulators blocked part of the TotalEnergies transaction, and oil prices collapsed the following year due to the pandemic, impacting Occidental's free cash flow and asset sales strategy. While it survived, it was a challenging time for the oil company and its investors. Hopefully, management's decision to make another debt-fueled acquisition won't come back to bite it again.
A high-risk, high-reward deal
Occidental Petroleum is the latest oil company to make a splashy deal. Its $12 billion acquisition of CrownRock will enhance its position in the Permian Basin while boosting its free cash flow by $1 billion. However, it's taking on a lot of debt to get this deal done, which has burned it in the past. While it has a plan to pay off a big chunk of that debt within a year, an unexpected decline in oil prices could foil that plan and weigh on its stock price. That downside risk makes Occidental a less appealing oil stock right now.
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Matthew DiLallo has positions in Chevron. 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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2023-12-12
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CVX
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TotalEnergies SE TTE announced that along with partners Hydra Storage Holding and Reatile Renewables, it has launched the construction of a major hybrid renewables project in South Africa, comprising a 216 megawatt (MW) solar plant and a 500 MWh battery storage system. This project is expected to start commercial operation in 2025 and provide clean energy to customers in South Africa longer than the available sunshine.
This project will supply dispatchable renewable electricity to the South African national grid for twenty years, equivalent to more than 400 gigawatt hours per year. Per the Power Purchase Agreement signed in November and courtesy of the storage system, the project will supply 75 MW of dispatchable power to the national utility Eskom on a continuous basis.
This hybrid renewable project will assist South Africa in its transition toward clean electricity generation and will expand TTE’s global portfolio of clean energy.
TotalEnergies' Vision
TotalEnergies has an ambition to become net zero by 2050. To achieve this target, it is adding more clean projects to its portfolio. TTE has already decided its long-term renewable energy goal of generating more than 100 terawatt hours of clean energy by 2030. The company has been increasing its renewable energy portfolio through acquisitions, partnerships and organic methods.
In 2022-end, TTE had a gross renewable electricity generation installed capacity of 17 gigawatt (GW). It will make substantial investments each year in its renewable business to expand operations globally. This hybrid renewable energy will assist the company in meeting its long-term renewable goal.
This oil and gas major is gradually building a portfolio of low-carbon businesses that could account for 15-20% of its sales by 2040.
Renewable Energy Gaining Traction
A transition in the energy space is evident, with industries now focusing on lowering emissions and planning to use energy generated from clean sources. Utilities are expanding their clean energy generation portfolios. Creating and operating large utility-scale renewable projects are viable, courtesy of the technological development of large battery storage projects. Battery storage projects are making renewable projects more dependable.
Per the latest International Energy Agency release, renewable energy will account for nearly 50% of the global electricity mix, up from 30% at the present level. Undoubtedly, this will create a massive demand for renewable projects and the companies that are investing in the clean energy space can enjoy the enormous increase in demand.
Along with TotalEnergies, 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 invest billions of dollars 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. It plans to reduce emissions from its operations by 30-35% by 2030.
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 working to end routine flaring by 2030.
Price Performance
Over the past year, shares of TTE have surged 13.7% compared with the industry’s growth of 6.2%.
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.
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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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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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
2023 has been a mixed year. While growth stocks enjoyed the upside momentum, several industries suffered due to high inflation and low consumer spending. However, it looks like better days are ahead, and if you are planning to invest in dividend stocks, consider the company fundamentals before making a move. If the company is stable, has a solid balance sheet and has a strong dividend history, it will continue generating steady income for years to come. As we inch closer to 2024, it is time to reevaluate the stocks you own and invest in those that look promising and have the possibility of generating passive income. With that in mind, here are the three strong buy dividend stocks to consider.
Chevron (CVX)
Source: Jeff Whyte / Shutterstock.com
Oil giant Chevron (NYSE:CVX) has rewarded investors for years and it aims to increase capital spending by 11% in 2024. This is a sign that it will be focusing on new projects and will be able to deliver strong returns. When it has more money, it will be able to return more to the shareholders. It aims to invest around $15.5 billion to $16.5 billion into capital projects in the coming year and has a few acquisitions that will work as catalysts for business growth.
Chevron has agreed to purchase Hess Corp. (NYSE:HES) for $53 billion, and while the deal hasn’t closed yet, it is expected to add long-term value to the company. It has also just closed the acquisition of PDC Energy, and this deal is expected to add 1 billion barrels of oil equivalent reserves.
In the third quarter, the company reported an EPS of $3.05 and currently enjoys a dividend yield of 4.25%. It announced a quarterly dividend of $1.51 which isn’t too bad in the current times. With the high capital budget on the projects, Chevron will see significant growth in the coming year. I believe it will be able to sustain the dividends and continue rewarding shareholders for years to come. The stock is down 18% year to date and is much lower than the 52-week high of $187.
The company is focused on investments that pay off in the long term. It has increased the dividend payout for 36 years straight, and it aims to grow the dividend even faster, at 8% in January. Higher capital spending, increased cash flow, and steady dividends make the company worth an addition to your portfolio.
AT&T (T)
Source: Shutterstock
Many have written off the telecom giant AT&T (NYSE:T) but it still has a long way to go. I believe the worst is over for it. The company is currently working on revamping the wireless network services and has signed a deal with Ericsson(NASDAQ:ERIC) to invest $14 billion over the next five years.
This deal could be a game-changer for the business, and it has given a boost to the stock. It is expected that this collaboration will help cover about 70% of the company’s wireless traffic across the U.S. T stock is up 5% over the past month and trading at $16.42 today. I believe the stock can make a comeback in 2024.
The company expects to generate $16.5 billion in free cash flow this year and has been steadily growing its wireless subscriber base. In the third quarter, it added 468,000 net phone subscribers. It is already working on revamping the Open RAN technology and this is an investment that will pay off in the coming years.
As free cash flow and subscribers continue to grow, it will be able to reward shareholders significantly.
The company is investing in next-gen technology and this shows its commitment to catering to the needs of the users. As a dividend stock, AT&T is a strong pick. It enjoys a dividend yield of 6.75% and it has enough cash flow to support this dividend. Add T stock to your portfolio before it starts to soar in 2024.
Morgan Stanley (MS)
Source: Ken Wolter / Shutterstock.com
If you aren’t willing to start trusting traditional banks again, you can consider Morgan Stanley (NYSE:MS) which sets itself apart from the rest. While it is a bank, the big reason to invest in it is the diversified revenue streams.
The majority of its revenue comes from the wealth management division which ensures consistency and stability. Since it doesn’t work like a lending business, it has a steady flow of income and it is predictable income to some extent.
With an improvement in the market conditions, it looks like Morgan Stanley could start soaring with the investment banking business. There is a positive sentiment in the market and as we see new IPO openings, we could see Morgan Stanley report higher underwriting revenue numbers.
For the third quarter results, it reported an EPS of $1.38 and a revenue of $13.3 billion, much higher than analyst expectations. However, its wealth management business disappointed investors by only adding $36 billion in net assets.
The stock is significantly down from the 52-week high of $101 and has dropped by 3% year to date. This is a good chance to grab the dividend stock. It enjoys a dividend yield of 4.10% and recently announced a quarterly dividend of $0.85. The company is stable, has an impressive balance sheet, and several catalysts are working in its favor which shows that it has a high chance of bouncing back in the coming year.
On the date of publication, Vandita Jadeja did not hold (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.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.
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The post 3 Strong-Buy Dividend Stocks for Promising Passive Income 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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2023-12-12
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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
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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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2023-12-11
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CVX
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By Marianna Parraga, Deisy Buitrago and Curtis Williams
HOUSTON/CARACAS, Dec 8 (Reuters) - Venezuela has begun contacting energy firms involved in an long-idled offshore natural gas project to push them to begin new exploration and operations near its maritime border with Guyana, five people close to the talks said.
The request to act on blocks that have not been touched in more than a decade comes amid an escalating territorial dispute with Guyana that has rattled the country and led to an emergency meeting of the United Nations Security Council.
Venezuelan President Nicolas Maduro wants state oil company PDVSA, and oil majors' BP BP.L, Chevron CVX.N and Shell SHEL.L to revive an offshore project shared with Trinidad and Tobago with some 8 trillion cubic feet (tcf) of gas reserves.
Called Plataforma Deltana, the discoveries were never developed amid insufficient capital, an unfinished reservoir sharing effort with Trinidad, and a lack of clear rules for investment.
In 2019, both countries authorized Shell to develop Trinidad's portion of the largest reservoir, called Manatee, with a final investment decision expected next year and gas output to start in 2028.
Recently, Maduro has backtracked on that decision, telling Trinidad's government in public comments in September that the fields should be jointly developed. His government and PDVSA started tapping companies to weigh their interest.
Chevron was the only company that completed exploration in Plataforma Deltana, certifying 7.3 tcf of recoverable gas and declaring two of Venezuela's five blocks commercial in 2010. It never took steps to begin production.
Russia's Rosneft ROSN.MM in recent years explored another block but did not complete work in the area, while TotalEnergies TTEF.PA and Equinor EQNR.OL returned one block to Venezuela after a non-commercial discovery. One of the five blocks was never awarded.
"They are talking about working at blocks 2 and 4, which are the most advanced ones," one of the sources said.
On Trinidad's side, those two blocks extend to Shell's Manatee project and to BP's Manakin shallow water block, both of which are moving to development and production design.
BP and Trinidad's government expect to begin negotiations with Venezuela to jointly produce gas at Manakin upon completion of discussions for Manatee, which have already started, according to another person familiar with the matter.
Chevron has been in talks with Venezuela about its license, two of the people said.
Venezuela also made initial contact with Australia's Melbana Energy MAY.AX, which operates in Cuba. The discussions could lead to a seismic contract for the less explored blocks, one of the people said.
Melbana said in a Dec. 10 statement that it is not in talks with Venezuela's government, and remains focused on its own projects, with "a busy work program underway."
Shell declined to comment. Venezuela's oil ministry, Trinidad's energy ministry, PDVSA and Chevron did not reply to requests for comment.
BP told Reuters it views the Manakin field as an important part of its future area development plan, even though it had been unable to progress work there.
"Since the temporary lifting of sanctions by the U.S. government, BP has been in early talks with the Trinidad and Tobago government assessing the opportunity to recommence development planning," the spokesperson said.
TRIPLE INTEREST
Plataforma Deltana is the closest energy project that Venezuela has to the waters in dispute with Guyana. Both nations have drawn maritime border lines that cross offshore oil and gas areas in the other's claimed territory.
The north portion of the Stabroek block, a massive area in development by Exxon Mobil XOM.N, CNOOC 0883.HK and Hess HES.N under license from Guyana, extends into Venezuelan waters, according to Maduro's government. One of Plataforma Deltana's blocks extends into Guyana's claimed waters.
Venezuela's oil ministry and PDVSA have worked since 2016 to outsource 2D seismic data collection and map areas including the Esequibo and the Isla de Aves territory in the Caribbean, which are in dispute with Guyana and Dominica, respectively, said Antero Alvarado, managing partner of consultancy Gas Energy Latin America.
"Venezuela has not completed seismic work in a very long time. The urgency of doing it now comes amid the dispute with Guyana and its renewed interest to export gas to markets like Trinidad," he said.
The territorial dispute with Guyana is being discussed at the International Court of Justice (ICJ), which this month ordered Venezuela to refrain from taking any action that would alter the situation with its neighbor. That came after Maduro's government held a vote on a referendum asking Venezuelans whether they accepted the ICJ's jurisdiction on the issue. They did not.
Maduro on Dec. 5 said he would authorize oil and mining exploration in the disputed areas with Guyana, but did not elaborate on locations or projects. PDVSA and state industrial conglomerate CVG were asked to create specific divisions for that purpose.
Guyana's President Irfaan Ali called Maduro's actions a blatant disregard of ICJ orders and an imminent threat to Guyana's territorial integrity.
What is the border dispute between Venezuela and Guyana? https://www.reuters.com/world/americas/what-is-border-dispute-between-venezuela-guyana-2023-12-06/
(Reporting by Marianna Parraga and Curtis Williams in Houston, and Deisy Buitrago in Caracas; Editing by Gary McWilliams, Daniel Wallis and Marguerita Choy)
((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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2023-12-11
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CVX
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By Julia Symmes Cobb and Kiana Wilburg
KINGSTOWN, Saint Vincent and the Grenadines Dec 14 (Reuters) - Guyana and Venezuela are committed to ensuring their region remains peaceful, Guyanese President Irfaan Ali said on Thursday during meetings with his Venezuelan counterpart President Nicolas Maduro, amid high tensions over a dispute involving a potentially oil-rich border area.
The two leaders met at the airport in Kingstown, in Saint Vincent and the Grenadines, alongside representatives from CARICOM, the Caribbean political and economic union, Brazil, the United Nations and the Community of Latin American and Caribbean States (CELAC).
Disagreements over the 160,000-square-km (62,000-square-mile) jungle region of Esequibo has run for decades, but Venezuela revived its claim, including to offshore areas, in recent years after major oil and gas discoveries.
The dispute is before the International Court of Justice, though a final ruling could be years away. Voters in Venezuela this month rejected the court's jurisdiction and backed the creation of a new state in a referendum.
Guyana has questioned the vote's turn-out and said its land border is not up for discussion, while political analysts in Caracas have said the vote was an attempt by Maduro to gauge support for his government ahead of a 2024 presidential election, and not a prelude to invasion. Maduro said last week he would authorize oil exploration in the Esequibo, drawing Ali's ire as the latter sought to reassure investors with projects already approved by the Guyanese government, including Exxon Mobil XOM.N and soon-to-be partner Chevron CVX.N, that their investments are safe.
"I made it very clear that Guyana has all the right to... approve of and facilitate any development, any investment, any partnership, any trading, any collaboration, any cooperation, to issue any license and the granting of any concession within our territorial space and within our sovereign space," Ali said.
Ali wore a bracelet showing a map of Guyana that includes the Esequibo and reiterated the dispute must be solved through the ICJ.
"Guyana is not the aggressor, Guyana is not seeking war, but Guyana reserves the right to work with all our partners to ensure the defense of our country," he added. "Both parties committed to ensuring the region remains a zone of peace."
The meetings are ongoing and Maduro has not yet made any statement.
Offshore areas are responsible for the entirety of oil production in Guyana, whose economy is booming thanks to output, which is expected to triple to more than 1.2 million barrels per day by 2027.
"We are not going anywhere — our focus remains on developing the resources efficiently and responsibly, per our agreement with the Guyanese government," Exxon said this week, adding claims by Maduro's government that it was involved in financing a plot to undermine the referendum are "ridiculous and baseless."
(Reporting by Kiana Wilburg in Kingstown, Julia Symmes Cobb and Vivian Sequera in Bogota, Mayela Armas in Caracas and Marianna Parraga in Houston Additional reporting by Sabrina Valle Writing by Julia Symmes Cobb)
((julia.cobb@thomsonreuters.com; +57-316-389-7187;))
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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2023-12-11
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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.
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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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2023-12-11
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CVX
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Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has a $313 billion investment portfolio that Warren Buffett has been in charge of for decades. And while he is known for buying companies for cheap and holding for decades, he's made some big moves in recent years. Tech stock Apple (NASDAQ: AAPL) has become over half of the portfolio.
In this video, Travis Hoium goes through the Apple position and the top five stocks, which make up 80% of this massive portfolio.
*Stock prices used were end-of-day prices of Dec. 12, 2023. The video was published on Dec. 13, 2023.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Travis Hoium has positions in Alphabet, Apple, and Berkshire Hathaway. The Motley Fool has positions in and recommends Alphabet, Apple, Bank of America, and Berkshire Hathaway. The Motley Fool recommends Chevron and Occidental Petroleum and recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
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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2023-12-11
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CVX
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By Scott Murdoch and Lewis Jackson
SYDNEY, Dec 14 (Reuters) - Australia's Woodside Energy and rival Santos are unlikely to announce any agreement on a proposed A$80 billion ($52 billion) tie-up to create a global oil and gas giant until at least February, said a person with direct knowledge of the talks.
Woodside WDS.AX and Santos STO.AX last week confirmed speculation they were in preliminary discussions to create a joint entity that would have assets stretching from Australia to Alaska, the Gulf of Mexico, Papua New Guinea, Senegal and Trinidad and Tobago.
Bankers are currently getting data and details on both companies, and work on a potential deal has only just started, the person said on condition of anonymity because the talks are private.
There is no fixed due diligence period or timetable at the moment, the person added.
Many Australians take holidays in December and January, the peak of the southern hemisphere summer, making it harder to complete transactions during the period.
Santos is being advised on the deal by Citigroup C.N and Goldman Sachs GS.N, while Morgan Stanley MS.N is advising Woodside, sources confirmed.
Santos, Woodside and Goldman Sachs declined to comment, while the other banks did not immediately respond to requests for comment.
A second person with direct knowledge of the talks said only about 5% of the progress needed has been made so far, and Woodside has been driving the talks between both companies.
Woodside's first approach to Santos was made shortly after Santos' investor day on Nov. 22, the first person said.
Perth-based Woodside, the larger of the two companies, has said the talks with Adelaide-based Santos were confidential and there was no certainty an agreement would materialise. Its market capitalisation stands at A$56.91 billion, while Santos is valued at A$22.1 billion.
In an end-of-year video message to staff on Wednesday, Santos CEO Kevin Gallagher said Woodside had approached his company "a number of times" over the past year or so about a deal, according to a company source who confirmed comments first reported by the Australian Financial Review.
INVESTORS SEEK VALUE
The proposed tie-up comes amid a wave of consolidation in the global energy sector, which has seen oil majors Exxon Mobil Corp XOM.N and Chevron CVX.N paying more than $50 billion each to acquire two U.S. producers.
Santos and its advisers have started reaching out to shareholders to get their perspective on a potential deal.
"We've been speaking to bucketloads of investment bankers," said Matthew Haupt, a portfolio manager at long-time Santos shareholder Wilson Asset Management.
"They're all trying to work out a successful price for Santos, the least Woodside can pay that will still make Santos shareholders happy."
Macquarie analysts said on Thursday that Woodside would need to offer between A$8.70 to A$9 per share for Santos based on synergies unlocked from the merger. The longer it took Woodside to convince its shareholders of the deal's merits, the greater the risk it would fail, as happened during its 2015 bid for Oil Search, they added.
Discussions with Santos come less than 18 months after Woodside acquired BHP Group's BHP.AX oil and gas business, and as it grapples to get final approvals for its A$16.5 billion Scarborough liquefied natural gas (LNG) venture in Western Australia, its biggest growth project.
The proposed all-stock Santos deal would give Woodside the advantage of even more considerable scale, both people said, adding it was very hard for the company to find an appropriate acquisition target elsewhere in the world given the industry consolidation already underway.
Santos, meanwhile, is fighting a legal challenge against its flagship Barossa gas project that has stalled the $4.3 billion investment for over a year and rattled investors. The company has also flagged soaring capital spending.
A combined Woodside-Santos would be expected to have access to cheaper funding and more exposure to international investors.
EXPLAINER-What would a Woodside and Santos merger look like? - Reuters News
Woodside-Santos merger global ranking chart https://tmsnrt.rs/3uXNrgT
TIMELINE-Biggest oil and gas sector deals since start of the century
(Reporting by Scott Murdoch and Lewis Jackson in Sydney; Writing by Praveen Menon; Editing by Jamie Freed)
((praveen.menon@thomsonreuters.com; Reuters Messaging: praveen.menon.thomsonreuters.com@reuters.net; Twitter: @Journopraveen))
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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2023-12-11
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CVX
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In the latest trading session, Chevron (CVX) closed at $144.35, marking a +0.03% move from the previous day. The stock's change was less than the S&P 500's daily gain of 0.39%. Meanwhile, the Dow experienced a rise of 0.43%, and the technology-dominated Nasdaq saw an increase of 0.2%.
Shares of the oil company witnessed a gain of 0.95% over the previous month, beating the performance of the Oils-Energy sector with its gain of 0.39% and underperforming the S&P 500's gain of 5.28%.
Investors will be eagerly watching for the performance of Chevron in its upcoming earnings disclosure. The company is expected to report EPS of $3.67, down 10.27% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $55.46 billion, showing a 1.8% drop compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $13.35 per share and revenue of $208.99 billion, which would represent changes of -29.1% and -15.13%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Chevron. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.58% lower. Currently, Chevron is carrying a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Chevron has a Forward P/E ratio of 10.81 right now. For comparison, its industry has an average Forward P/E of 6.69, which means Chevron is trading at a premium to the group.
It's also important to note that CVX currently trades at a PEG ratio of 0.76. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. CVX's industry had an average PEG ratio of 0.82 as of yesterday's close.
The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. With its current Zacks Industry Rank of 46, this industry ranks in the top 19% of all industries, numbering over 250.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
Zacks Names #1 Semiconductor Stock
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With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
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Chevron Corporation (CVX) : 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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2023-12-11
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CVX
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By David French
Dec 14 (Reuters) - Six U.S. oil and gas bankers who missed out on a wave of mega deals in the oil patch after leaving mergers and acquisitions powerhouse Citigroup C.N last year to join smaller firm Guggenheim Securities are now decamping to Moelis & Co MC.N, according to people familiar with the matter.
The merry-go-round underscores the restlessness of dealmakers who try to get hired on big, high-prestige deals while working for firms that let them keep more of the advisory fees they generate. Energy and power has been the most active sector for dealmaking this year, accounting for $460.3 billion worth of transactions globally, up 4% year-on-year, according to LSEG.
The six bankers which Moelis has hired from Guggenheim include Muhammad Laghari, Alexander Burpee, Benjamin Dubois, and Ryan Staha, said the sources, who requested anonymity because the moves have not yet been announced.
The bankers, who previously worked at Citigroup together, are on gardening leave and will start at Moelis in the next few weeks, the sources added.
While Citigroup advised Pioneer on its sale to Exxon, neither Guggenheim nor Moelis were on these deals.
Deal-focused investment banking boutiques like Moelis and Guggenheim typically allow their bankers to keep more of their client fees compared with big bulge-bracket banks like Citigroup, which run more diverse businesses they have to pay for.
Guggenheim ranks 19th in LSEG's league table for U.S. oil and gas deals this year with $5.8 billion of announced transactions, having been outside the top 25 advisers in 2022. Its largest mandate was helping Civitas Resources CIVI.N on its $4.7 billion purchase of energy producers from private equity firm NGP, which was announced in June.
Moelis has also been a minor U.S. player. It is currently 25th in the same league table this year, and was outside the top 25 in 2022. It has close ties, however, to a number of major international energy clients, including Saudi Aramco 2222.SE and Abu Dhabi National Oil Co.
(Reporting by David French in New York Editing by Matthew Lewis)
((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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2023-12-11
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CVX
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The latest tally of analyst opinions from the major brokerage houses shows that among the 30 stocks making up the Dow Jones Industrial Average, Chevron is the #8 analyst pick. Chevron also comes in above the median of analyst picks among the broader S&P 500 index components, claiming the #89 spot out of 500.
Looking at the stock price movement year to date, Chevron is lower by about 19.2%.
VIDEO: Dow Analyst Moves: 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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2023-12-11
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CVX
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For Immediate Release
Chicago, IL – December 11, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Chevron Corp. CVX, SAP SE SAP, United Parcel Service, Inc. UPS, Citigroup Inc. C and TransDigm Group Inc. TDG.
Here are highlights from Friday’s Analyst Blog:
Top Analyst Reports for Chevron, SAP and United Parcel Service
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Chevron Corp. (CVX), SAP SE (SAP) and United Parcel Service, Inc. (UPS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today's research reports here >>>
Chevron's shares have underperformed the Zacks Oil and Gas - Integrated - International industry over the past year (-11.9% vs. -0.5%). The company has grappled with the 2020 commodity price crash, leading to substantial spending cuts. Concerns include high sensitivity to oil prices and a 10-year reserve replacement ratio of 100%, indicating challenges in replenishing produced energy. Considering all these factors, investors are advised to wait for a better entry point.
Nevertheless, Chevron is positioned as one of the top global integrated oil firms, set for sustainable production growth, particularly due to its dominant position in the lucrative Permian Basin. Further, the recent acquisition of Hess Corp. is expected to significantly strengthen Chevron's presence in oil-rich Guyana.
(You can read the full research report on Chevron here >>>)
Shares of SAP have outperformed the Zacks Computer - Software industry over the year-to-date period (+56.3% vs. +55.2%). The company's performance is benefiting from continued strength in its cloud business (especially the new Rise with SAP and Grow with SAP solutions) across all regions.
Momentum in SAP's business technology platform, particularly the S/4HANA solution along with opportunities presented by proliferation of generative AI bode well. Management also reaffirmed its 2023 guidance as well as its long-term targets. Frequent product launches, and strategic acquisitions and collaborations are other tailwinds.
However, continued softness in the Software license and support business segment coupled with global macroeconomic weakness and geopolitical instability remain concerning. Also, increasing research & development costs, and stiff competition in the cloud space are headwinds.
(You can read the full research report on SAP here >>>)
Shares of United Parcel Service have underperformed the Zacks Transportation - Air Freight and Cargo industry over the past year (-8.4% vs. +6.7%). The company now expects revenues in 2023 to be between $91.3-$92.3 billion. The new forecast is not only below the previous outlook of around $93 billion but also much lower than 2022's actual figure.
Management trimmed its revenue forecast for the full year due to weak e-commerce delivery demand and lost clients during the turbulent labor negotiations. The five-year deal with the International Brotherhood of Teamsters for better pay and working conditions is worth less than $30 billion. It is likely to keep labor cost at high levels.
UPS is looking to drive growth in this uncertain scenario by improving efficiencies. Efforts to reward its shareholders also bode well for UPS stockholders. The company's strong free cash flow generating ability is encouraging and supports its shareholder-friendly activities.
(You can read the full research report on United Parcel Service here >>>)
Other noteworthy reports we are featuring today include Citigroup Inc. and TransDigm Group Inc..
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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 Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
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Citigroup Inc. (C) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
SAP SE (SAP) : Free Stock Analysis Report
Transdigm Group Incorporated (TDG) : 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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2023-12-11
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CVX
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Stocks have staged an impressive recovery after a disappointing year in 2022. After falling into the depths of a bear market, the S&P 500 index has rallied back 31%. Meanwhile, the Dow Jones Industrial Average, which tracks 30 of the largest companies in the U.S. and is one of the oldest stock market indexes in the world, has gained 26% and sits just 2.3% below its all-time high from January 2022.
The strong performance in stocks has many optimistic that we're in a new bull market, and for good reason. Since 1929, the average bull market has lasted 3.5 times longer than an average bear market, proving that time in the market beats timing the market. With that said, here are three Dow stocks you can buy and hold for the long haul.
Image source: Getty Images.
1. Visa's robust network makes it an excellent long-term performer
When it comes to long-term investing, investors want to see a company with a strong competitive advantage that allows them to maintain market share over competitors. Visa (NYSE: V) has one of the most robust advantages over its competitors thanks to the strong network effects that make it the largest payment processor in the world.
In 2022, Visa's network handled $14 trillion in total volume across over 260 billion transactions. Mastercard, its next closest competitor, handled $8 trillion in volume across 150 billion transactions.
Visa has had 65 years to build up its merchant and customer base, creating a feedback loop that attracts more merchants and customers and further strengthens its network effects. As it scales up and increases cash flows, it has more money to reinvest in the business, enhance security features, and reward shareholders through dividends and stock buybacks.
The credit card processor is also highly efficient at generating profits. Over the last decade, Visa's average profit margin is a stellar 47%. During that same time, its free cash flow per share has grown 255%, or 13.5% annually.
Visa is an excellent company that dominates its space and enjoys healthy profit margins and cash flows -- making it an outstanding stock to buy and hold long-term.
2. American Express' strong brand gives it a resilient customer base
American Express (NYSE: AXP) operates the third-largest payment network, processing $1.5 billion in total volume across 10 billion transactions. While it earns fees through its payment network, American Express differs from Visa and Mastercard because it holds loans on its balance sheet, helping it generate interest income.
Holding on to credit card loans can be risky, especially during economic turbulence when there is an uptick in delinquency rates. What makes American Express stand out is its resilient customer base, which it attracts thanks to its strong brand.
Customers are drawn to American Express because they associate it with luxury. The company has done an excellent job of branding through its exclusive card products that offer luxurious benefits and has forged partnerships with luxury brands and retailers to reinforce that perception further.
American Express' loan portfolio could make it more vulnerable than Visa in a downturn, but the company should be able to hold up better than competitors who also hold loans. In the third quarter, the net write-off rate on its credit card loans was 2.2%, well below the industry average of 3.8%.
American Express' strong brand and resilient customer base make this another excellent Dow stock to include in your portfolio today.
3. Chevron's balanced business model provides reliable cash flows
Chevron (NYSE: CVX) operates in the oil and gas industry, which, as a whole, can experience volatility depending on oil prices. However, what makes Chevron an appealing stock is its business model that balances upstream and downstream operations to generate consistent cash flows.
Upstream operations include exploring, producing, and transporting crude oil and natural gas. This business benefits from higher oil prices and can be an excellent source of income when oil prices are high. However, income from this segment can fluctuate widely depending on conditions in the oil and gas markets.
Downstream operations include refining crude oil into petroleum, transporting products through pipelines, and running gas stations across the globe. Chevron's downstream operations provide it with a more stable source of income and can help smooth out volatile earnings due to fluctuating oil prices.
The company also plans to invest $10 billion in lower-carbon opportunities through 2028, and last year, it invested over $3 billion to acquire Renewable Fuels Group -- making it the second-largest bio-renewable diesel producer in the U.S.
Chevron has raised its dividend payout to investors for 36 consecutive years, a testament to its balanced business model and robust cash flows -- making it another solid stock to own for the long haul.
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American Express is an advertising partner of The Ascent, a Motley Fool company. Courtney Carlsen has positions in Chevron. The Motley Fool has positions in and recommends Mastercard and Visa. The Motley Fool recommends Chevron and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. 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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2023-12-11
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CVX
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For Immediate Release
Chicago, IL – December 11, 2023 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2195742/energy-stocks-deep-value-or-traps)
Energy Stocks: Deep Value or Traps?
Welcome to Episode #352 of the Value Investor Podcast.
(1:05) - Where Are The Value Stocks Heading Into 2024?
(14:45) - Tracey’s Top Picks To Keep On Your Watchlist
(34:15) - Episode Roundup: XOM, BKR, PXD
Podcast@Zacks.com
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
With WTI oil prices falling 7 weeks in a row, many of the energy stocks have plunged as well. Some are sitting at 52-week lows. There would appear to be a bunch of deep value.
Is the sell-off overdone? Is this a buying opportunity in the energy stocks again?
Or is it a trap?
Different Focuses Within Energy
Within the oil and natural gas complex, there are different focuses. There are some companies that are considered Big Oil, which produce oil and natural gas, do refining, transportation and own service stations. They may also produce petrochemicals.
There are some companies that are purely producers of oil and natural gas in the United States. Some produce only in Canada.
And then there are also the companies on the services side, which help increase drilling productivity and efficiency.
Most of these stocks have seen a sell-off and many of these companies are cheap.
Definition of Value Versus a Trap
Reminder, you can have a company that has a low P/E and other valuation metrics, but it may not be a true value stock. Instead, it may be a trap. How can you tell the difference?
Look at the earnings estimates for this year and next. Are earnings expected to grow next year? If so, then the stock is likely to be a value, and not a trap. Falling earnings are a sign that maybe the stock is cheap for a reason.
5 Energy Stocks: Deep Value or Traps?
1. Exxon Mobil Corp. XOM
Exxon Mobil is one of the largest oil companies in the United States. It produces oil and natural gas globally and does refining, distribution, chemicals and owns service stations. Exxon Mobil recently announced it was acquiring Permian Basin driller Pioneer Natural Resources.
Shares of Exxon Mobil are down 10.4% year-to-date and are trading near 1-year lows. It's cheap on a P/E basis, with a forward P/E of 10.8. Exxon Mobil pays a dividend of 3.9%.
Is Exxon Mobil a deep value or a trap?
2. Chevron Corp. CVX
Chevron is also one of the largest oil companies in the United States. It's also a big oil company, with refining and service station operations. It recently announced it would acquire Hess Corp which will give it exposure to the Guyana oil fields.
Shares of Chevron have dropped 19.9% year-to-date and are trading near 1-year lows. It's cheap, with a forward P/E of just 10.7. Like Exxon Mobil, it also pays a dividend, currently yielding 4.2%.
Is Chevron a deep value or a trap?
3. Diamondback Energy, Inc. FANG
Diamondback Energy is an independent oil and natural gas producer in the Permian Basin in the United States. Shares are bucking the negative trend, up 9% year-to-date.
Yet Diamondback Energy is cheap. It is trading with a forward P/E of 7.8 and a PEG ratio of 0.4. Diamondback Energy also pays a dividend, which is yielding 2.3% on Zacks. I believe that does not include the variable component.
Is Diamondback Energy a deep value or a trap?
4. Matador Resources Co. MTDR
Matador Resources produces oil and natural gas in the Delaware Basin and Eagle Ford shale. Shares of Matador Resources are down 6.2% year-to-date.
It's dirt cheap with a forward P/E of just 7.5. Matador Resources also pays a dividend, yielding 1.5%. Tracey owns Matador Resources in the Insider Trader portfolio.
Is Matador Resources a deep value or a trap?
5. SLB SLB
SLB is a global technology company driving energy innovation. It has a global presence in more than 100 countries.
Shares of SLB have fallen 9.6% year-to-date but have really taken it on the chin in the last 3 months, as oil prices have weakened. Shares are down 20.5% during that time.
SLB is cheap with a forward P/E of 16.3. It also pays a dividend yielding 2.1% and has a share buyback program.
Is SLB a deep value or a trap?
What Else Do You Need to Know About Cheap Energy Stocks?
Tune into this week's podcast to find out.
[In full disclosure, Tracey owns shares of CVX in her own personal portfolio.]
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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
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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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2023-12-11
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CVX
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CARACAS, Dec 14 (Reuters) - Venezuela's President Nicolas Maduro is expected in Saint Vincent and the Grenadines on Thursday to meet with Guyanese President Irfaan Ali, amid high tensions over a dispute involving a potentially oil-rich border area.
Disagreement over the 160,000-square-km (62,000-square-mile) jungle region of Esequibo has run for decades, but Venezuela revived its claim, including to offshore areas, in recent years after major oil and gas discoveries.
The dispute is before the International Court of Justice, though a final ruling could be years away. Voters in Venezuela this month rejected the court's jurisdiction and backed the creation of a new state in a referendum.
Guyana has questioned the vote's turn-out and said its land border is not up for discussion, while political analysts in Caracas have said the vote was an attempt by Maduro to gauge support for his government ahead of 2024 presidential elections, and not a prelude to invasion.
Saint Vincent and the Grenadines Prime Minister Ralph Gonsalves, who also serves as president pro tempore of the Community of Latin American and Caribbean States (CELAC), is expected to host the meeting, which he announced over the weekend.
"We hope to achieve a relaxation of tensions and lower the aggressiveness of discourse by Guyana," Venezuelan foreign minister Yvan Gil told journalists earlier this week, reiterating comments by Maduro and his allies that the vote gave them a mandate to control the Esequibo.
Guyana's Ali has said his country will defend its sovereignty and its borders and that Venezuela should deescalate its advances toward Guyana.
Maduro said last week he would authorize oil exploration in the Esequibo, drawing Ali's ire as the latter sought to reassure investors with projects already approved by the Guyanese government, including Exxon Mobil and soon-to-be partner Chevron, that their investments are safe.
Offshore areas are responsible for the entirety of oil production in Guyana, whose economy is booming thanks to output, which is expected to double to more than 1.2 million barrels per day by 2027.
"We are not going anywhere — our focus remains on developing the resources efficiently and responsibly, per our agreement with the Guyanese government," Exxon said this week, adding claims by Maduro's government that it was involved in financing a plot to undermine the referendum are "ridiculous and baseless."
Both Maduro and Ali have spoken with United Nations Secretary General Antonio Guterres about the dispute, South American countries last week urged a peaceful resolution and the United States' has expressed "unwavering support for Guyana's sovereignty."
Brazil's leftist President Luiz Inacio Lula da Silva has called for dialogue and is expected to send a representative.
(Reporting by Mayela Armas in Caracas, additional reporting by Sabrina Valle in Houston Writing by Julia Symmes Cobb)
((julia.cobb@thomsonreuters.com; +57-316-389-7187;))
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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2023-12-11
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CVX
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Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Nucor Corp. (Symbol: NUE), where a total volume of 6,161 contracts has been traded thus far today, a contract volume which is representative of approximately 616,100 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 45% of NUE's average daily trading volume over the past month, of 1.4 million shares. Particularly high volume was seen for the $167.50 strike call option expiring December 15, 2023, with 1,589 contracts trading so far today, representing approximately 158,900 underlying shares of NUE. Below is a chart showing NUE's trailing twelve month trading history, with the $167.50 strike highlighted in orange:
Chevron Corporation (Symbol: CVX) saw options trading volume of 47,357 contracts, representing approximately 4.7 million underlying shares or approximately 42.6% of CVX's average daily trading volume over the past month, of 11.1 million shares. Especially high volume was seen for the $115 strike put option expiring June 21, 2024, with 19,732 contracts trading so far today, representing approximately 2.0 million underlying shares of CVX. Below is a chart showing CVX's trailing twelve month trading history, with the $115 strike highlighted in orange:
And L3Harris Technologies Inc (Symbol: LHX) saw options trading volume of 4,292 contracts, representing approximately 429,200 underlying shares or approximately 42.4% of LHX's average daily trading volume over the past month, of 1.0 million shares. Particularly high volume was seen for the $210 strike call option expiring December 15, 2023, with 2,469 contracts trading so far today, representing approximately 246,900 underlying shares of LHX. Below is a chart showing LHX's trailing twelve month trading history, with the $210 strike highlighted in orange:
For the various different available expirations for NUE options, CVX options, or LHX options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
Also see:
LQ Split History
Funds Holding MTRY
STRS YTD Return
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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2023-12-10
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CVX
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The rising market in 2023 has not lifted all boats. Some stocks look extremely cheap right now. This offers investors an opportunity to buy shares of great companies at distressed prices and ride them higher in coming months and years. While some stocks are down for good reason, many have been dragged lower by cyclical economic factors, sector trends, and poor investor sentiment that are beyond the company’s control.
This is the time investors should pounce and take advantage of stocks that are trading at low multiples. After all, the goal is still to buy low and sell high, right? Let’s explore the three best cheap stocks to buy in December.
AbbVie (ABBV)
Source: Valeriya Zankovych / Shutterstock.com
Pharmaceutical giant AbbVie’s (NYSE:ABBV) stock looks cheap right now, having fallen 10% in 2023 and not far from its 52-week low.
The pharma company’s share price has been brought low by valid concerns. The first is that its top-selling arthritis medication, Humira, is losing its patent protection. Also, ABBV is subject to competition from cheaper generic alternatives. Humira has been one of the top-selling medications in the world for over a decade. AbbVie racked up $21 billion in sales during 2022 alone.
But AbbVie isn’t taking the patent expiration lying down. The company has been on a tear lately as it acquires new companies and the medications that come with them. Most recently, AbbVie announced that it is buying neuroscience drug maker Cerevel Therapeutics (NASDAQ:CERE) for $8.7 billion. That deal will give AbbVie access to Cerevel’s psychiatric and neurological disorder medications. Also, AbbVie announced that it is buying cancer drug maker ImmunoGen (NASDAQ:IMGN) for nearly $10 billion.
It likely won’t be long before AbbVie is back at the top of the pharmaceutical sales charts.
Dell Technologies (DELL)
Source: Jonathan Weiss / Shutterstock.com
Buy the pullback in Dell Technologies’ (NYSE:DELL) stock. Shares of the personal computer (PC) manufacturer have fallen 6% since it announced mixed third-quarter financial results.
The company reported earnings per share (EPS) of $1.88, which was well above the Wall Street consensus of $1.46 a share. However, Dell’s revenue totaled $22.30 billion, down 10% from a year ago and below the $23 billion that analysts had forecast.
Dell said that its revenues continue to be challenged by ongoing weakness in corporate PC demand. But, company executives say that they expect a rebound in corporate PC sales globally over the course of 2024. Additionally, Dell is expected to get a lift in the year ahead from artificial intelligence (AI). The company said that its backlog for AI-optimized servers doubled sequentially in the most recent quarter. In fact, Dell shipped over $500 million of AI-optimized severs during Q3.
Despite the post-earnings drawdown, DELL stock has risen 65% in 2023. Trading at 18 times future earnings estimates, the stock still looks affordable. Plus, it pays one of the best dividends of any tech security with a quarterly payout of 37 cents a share, giving it a yield of 2.19%. And finally, Dell bought back $744 million of its own stock in Q3.
Chevron (CVX)
Source: Jeff Whyte / Shutterstock.com
Oil prices continue to slump with West Texas Intermediate (WTI) crude oil currently trading at $70 a barrel, down from more than $90 earlier this year.
The drop in crude prices has dragged the stock of U.S. oil major Chevron (NYSE:CVX) down with it. CVX stock has declined 18% in 2023 and hovering near a 52-week low. Trading at just 10 times future earnings estimates, Chevron’s stock looks cheap. Also, it pays a quarterly dividend that yields 4.21%.
Additionally, weighing on CVX stock right now and helping to pull it lower than other oil securities, is its proposed $53 billion acquisition of Hess Corp. (NYSE:HES). Chevron is offering $171 for each share of Hess. The deal is valued at $60 billion, including some Hess debt that Chevron has agreed to absorb. Analysts have raised doubts about whether the deal is necessary or not, and investors appear to be taking a wait-and-see approach. Regardless, there’s no doubt that CVX stock is cheap right now.
On the date of publication, Joel Baglole 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.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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The post The 3 Best Cheap Stocks to Buy in December 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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2023-12-10
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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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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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2023-12-10
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CVX
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EQT Corp. (NYSE: EQT) has quietly delivered market-smashing total returns over the last five years. The natural gas giant has doubled in value since 2018, easily outpacing the roughly 66% return for the S&P 500 (14.6% annualized versus 10.6% annualized). Add in its dividend, and its total return is even higher.
The natural gas stock should have plenty of fuel to continue rising over the next several years. However, most investors are completely unaware of the company's value-creating potential because natural gas just isn't a hot commodity like oil or renewable energy. Here's why you'll want to take a closer look at EQT, especially if you want a fast-rising dividend.
A change at the top
EQT became the country's largest natural gas producer in 2017 when it acquired Rice Energy. The $6.7 billion deal combined two leading players in the gas-rich Marcellus and Utica shales of the Appalachian Basin. The company expected the transformational merger to create significant shareholder value by turning it into a free cash flow machine.
That didn't happen initially. This underperformance led Toby Rice (a former executive at Rice Energy) to launch a proxy campaign to wrestle control of EQT from its board and management team in late 2018. Shareholders elected the Rice-supported board in 2019, which installed Toby as the CEO. He has since been on a mission to help EQT realize the full potential of its world-class natural gas assets.
Focused on creating a cash-producing behemoth
Under Rice's control, EQT has focused on increasing its scale to reduce costs so that it can produce more free cash flow. The company has made several scale-enhancing acquisitions to enhance margins and free cash flow.
In late 2020, the company acquired Chevron's upstream and midstream assets in the Appalachian Basin for $735 million. It expected the assets' favorable cost structure to improve its margins and boost free cash flow. It followed that up the following year with its transformative transaction of Alta Resource Development. The nearly $3 billion deal extended its operations into the Northern Marcellus while boosting its free cash flow. Finally, EQT recently closed its strategic acquisitions of Tug Hill and Xcl Midstream. It paid $5.2 billion for assets that should reduce production costs and grow its free cash flow.
EQT has also leveraged its growing scale to sign midstream deals that should help it maximize the value of the gas it produces. It recently signed two of the largest firm sales agreements in the history of the natural gas market to ship gas on the Mountain Valley Pipeline, locking in premium pricing in high-demand markets. It also signed an agreement to export gas from Commonwealth LNG to reach lucrative export markets.
Becoming a free cash flow growth machine
Under Toby Rice's leadership, EQT has started to become the free cash flow machine initially envisioned in the Rice Energy merger. The company has produced $642 million in free cash flow through the first nine months of this year.
EQT's improving free cash flow has enabled it to start returning money to shareholders. It initiated a dividend in late 2021. The company has since increased its payment by 25% overall (20% in 2022 and 5% this year). EQT has also doubled its share repurchase program to $2 billion (which still has $1.4 billion remaining). On top of that, it has been strengthening its balance sheet by retiring debt, including $1.9 billion so far this year.
However, the company is only scratching the surface of its free cash flow potential. EQT believes it can produce $14 billion in cumulative free cash flow through 2028 at the current projected price for natural gas. That's about 60% of the company's current enterprise value. It would give EQT more money to grow its dividend (which currently yields 1.7%, slightly above the S&P 500's 1.5% dividend yield), repurchase shares, and further strengthen its balance sheet. That combination of growing cash returns and balance sheet improvement could enable EQT to produce strong total returns in the coming years.
Lots of fuel left to continue rising
EQT stock has quietly doubled over the past five years. Most investors have yet to discover the company, which Toby Rice and his team have transformed into a free cash flow growth machine. It's on track to produce $14 billion in free cash over the next four years, most of which it will likely return to shareholders via dividends and buybacks. That could give it the fuel to continue producing strong total returns. And that means you haven't missed out on the gas giant, which still looks like a good buy right now.
Should you invest $1,000 in EQT right now?
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Matthew DiLallo has positions in Chevron. The Motley Fool has positions in and recommends EQT. 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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2023-12-09
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CVX
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Chevron (NYSE: CVX) recently released its preliminary capital plans for 2024. The oil giant expects to increase its capital spending by about 11% next year. It's focusing on investing in projects that will deliver high returns and durable cash flow. That would give it more money to return to shareholders via dividends and stock buybacks. Here's a look at Chevron's plans for the upcoming year.
An acquisition-driven spending boost
Chevron plans to invest between $15.5 billion and $16.5 billion into organic capital projects next year. In addition, it sees capital spending at its joint ventures (CPChem and Kazakhstan) coming in at around $3 billion. That's about 11% higher than last year at the midpoint.
The company's budget doesn't include capital spending related to Hess (NYSE: HES), which Chevron agreed to acquire in October. The company expects that deal to close in the first half of next year. It sees its annual capital spending budget rising to a range of $19 billion-$22 billion following its acquisition of Hess.
One factor driving Chevron's capital spending increase is its recently closed acquisition of PDC Energy. Chevron expected to increase its capital spending budget by $1 billion per year following its deal for PDC Energy, boosting its range to $14 billion-$16 billion through 2027. It could eclipse the high-end of that range next year. However, the company also expected the deal to boost its annual free cash flow by $1 billion, assuming oil averages $70 per barrel (crude oil is currently in the mid-$70s).
Drilling for cash
Chevron plans to spend about $14 billion of its capital budget on oil and gas exploration and production projects. It will invest roughly two-thirds of that money into its U.S. operations, including about $5 billion into the Permian Basin. Chevron plans to invest another quarter of its capital into its Gulf of Mexico operations, including its Anchor project, which should start producing oil next year.
Chevron's focus on the Permian Basin is noteworthy. The company can earn high returns on capital employed (ROCE) and generate growing free cash flow.
Image source: Chevron. ROCE = returns on capital employed.
Chevron's focus on drilling in high-return areas like the Permian has paid off over the years. It has delivered a peer-leading improvement in its ROCE over the last five years. The company expects to continue improving its ROCE over the next few years by investing capital into its highest-return operations, like the Permian. That's helping fuel strong cash-flow growth for the company. Chevron sees its free cash flow more than doubling by 2027 as it executes its investment strategy.
Chevron also plans to invest about $1.5 billion into downstream capital projects (e.g., refining) and about $2 billion on lower-carbon projects as it slowly grows out new energy business lines. Among its notable lower-carbon projects is its Geismar renewable diesel expansion project, which should start up next year. The company's growing lower-carbon energy platform could become a meaningful future free-cash-flow driver.
Generating more cash to return to shareholders
While Chevron is increasing its capital spending, CEO Mike Wirth stated it is "maintaining capital discipline in both traditional and new energies." It's focusing its investments on those that achieve attractive returns. Further, Wirth stated, "These investments are expected to underpin durable free cash flow growth to support our objective of returning more cash to shareholders."
Chevon's dividend is one aspect of its shareholder returns. The company has increased its payout for 36 straight years and grown the dividend at a peer-leading 6% annual rate over the last five years, including by 6% earlier this year.
The oil company expects to grow its dividend at an even faster rate next year, with plans to boost its payout by 8% in January. It could deliver higher sustained dividend growth in the future, fueled by its high-return capital investments and needle-moving Hess deal. Chevron can grow its free cash flow at a more than 10% annual rate through 2027 at an average oil price of around $60 per barrel.
Chevron also plans to ramp up its share repurchase pace. It expects to increase its annual share repurchase rate by $2.5 billion after closing its Hess acquisition, boosting its buyback to the top end of its $10 billion to $20 billion annual range. It could continue buying back shares at the upper end of that range if oil prices remain over $70 a barrel.
A well-oiled machine
Chevron plans to increase its capital spending next year. This investment spending should pay off in the future because it's focusing that capital on high-return projects that should produce growing cash flow. That will give Chevron more money to return to shareholders via dividends and repurchases.
This combination of increased cash flow and shareholder returns could give Chevron the fuel to produce attractive total returns in the coming years, making it look like an excellent oil stock to buy for the long haul.
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Matthew DiLallo has positions in Chevron. 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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2023-12-08
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CVX
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Energy stocks were higher late Friday afternoon, with the NYSE Energy Sector Index rising 1.2% and the Energy Select Sector SPDR Fund (XLE) up 1%.
The Philadelphia Oil Service Sector Index gained 1.4%, and the Dow Jones US Utilities Index fell 0.4%.
Front-month West Texas Intermediate crude was rising 2.8% to $71.29 a barrel, while global benchmark Brent crude was advancing 2.5% to $75.87 a barrel. Henry Hub natural gas futures were 0.9% lower at $2.56 per 1 million BTU.
In corporate news, Sunnova Energy International (NOVA) shares tumbled 16% after two lawmakers sent a letter to the US Department of Energy Loan Programs Office Director Jigar Shah about a $3 billion partial loan guarantee to the company's Sunnova Energy unit.
Borr Drilling (BORR) shares jumped more than 7% after its board approved a $100 million share-buyback plan.
Chevron (CVX) and Hess (HES) said in separate regulatory filings that they have received requests from the US Federal Trade Commission for additional information on their merger agreement. Hess rose 2.3%, and Chevron added 1.4%.
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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2023-12-08
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CVX
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Energy stocks were higher Friday afternoon, with the NYSE Energy Sector Index and the Energy Select Sector SPDR Fund (XLE) both adding almost 1%.
The Philadelphia Oil Service Sector Index gained 1.1%, and the Dow Jones US Utilities Index fell 0.6%.
Front-month West Texas Intermediate crude was rising 2.1% to $70.79 a barrel, while global benchmark Brent crude was advancing 1.9% to $75.44 a barrel. Henry Hub natural gas futures were fractionally lower at $2.58 per 1 million BTU.
In corporate news, Borr Drilling (BORR) shares jumped more than 7% after its board approved a $100 million share-buyback plan.
Dynagas LNG Partners (DLNG) fell 1.64% after it reported Q3 adjusted diluted earnings of $0.01, down from $0.04 a year earlier. One analyst surveyed by Capital IQ expected $0.11.
Chevron (CVX) and Hess (HES) said in separate regulatory filings that they have received requests from the US Federal Trade Commission for additional information on their merger agreement. Hess rose 1.7% and Chevron added 1%.
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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2023-12-08
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CVX
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By David French and Anirban Sen
Dec 8 (Reuters) - Endeavor Energy Partners is exploring a sale that could value the largest privately-held oil and gas producer in the Permian basin of the United States at between $25 billion and $30 billion, according to people familiar with the matter.
The sale would come almost 45 years after Texas oilman Autry Stephens started the company that would become Endeavor. The 85-year-old wildcatter has decided to capitalize on a wave of mega deals sweeping the sector, the sources said.
Stephens has asked JPMorgan Chase JPM.N bankers to prepare to launch a sale process for Endeavor in the first quarter of 2024, the sources said, cautioning no transaction is certain and asking not to be identified because the deliberations are confidential.
Stephens has considered offers from suitors for Endeavor in the past, including in 2018, Reuters has reported. He now wants to settle the company's future rather than let his estate decide after his death who it should sell it to, the sources said.
Endeavor and JPMorgan declined to comment.
The universe of potential deep-pocketed buyers for a company the size of Endeavor is limited. However, the consolidation wave hitting the industry, as producers seek to boost scale and lock up the best acreage, shows there would be appetite among the few.
In October, Exxon Mobil XOM.N clinched a $60 billion deal to buy Pioneer Natural Resources PXD.N and Chevron CVX.N announced a $53 billion agreement to buy Hess HES.N.
In these transactions, the acquirers are using their stock as currency, rather than tapping into their cash piles. This leaves them with sufficient financial firepower to bid for Endeavor, even as they try to complete and integrate these acquisitions. Exxon is familiar with Endeavor's operations because the two companies teamed up to drill on some of the latter's land until 2022.
ConocoPhillips COP.N completed in October a $2.7 billion deal to buy out a 50% stake in the Surmont oil sands project in Canada. It has also shown an interest in CrownRock, which is majority-owned by private equity firm Lime Rock Partners and led by another Texas wildcatter, Timothy Dunn, Reuters has reported. The sale process for CrownRock is ongoing.
It is unclear whether Exxon, Chevron or Conoco will pursue a bid for Endeavor. All three companies did not immediately respond to requests for comment.
There has been outreach from multiple interested parties in recent times, which helped influence the decision to explore a sale of Endeavor, two of the sources said.
Stephens, a former appraisals engineer who became more known through his appearances on the TV documentary series Black Gold, grew Endeavor by acquiring the unloved acreage of his competitors and managing to extract oil and gas profitably.
To lower his production costs, Stephens created and used his own fracking, construction, trucking and other services companies.
Endeavor produced 331,000 barrels of oil equivalent in the second quarter of 2023, up 25% from the corresponding period in 2022, according to Fitch Ratings. The credit ratings agency projected last month that Endeavor will generate about $1 billion of free cash flow in 2024.
(Reporting by David French and Anirban Sen in New York; Editing by Susan Fenton)
((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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2023-12-08
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CVX
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In early trading on Friday, shares of Boeing topped the list of the day's best performing Dow Jones Industrial Average components, trading up 1.3%. Year to date, Boeing registers a 26.2% gain.
And the worst performing Dow component thus far on the day is Honeywell International, trading down 1.8%. Honeywell International is lower by about 9.4% looking at the year to date performance.
Two other components making moves today are Procter & Gamble, trading down 0.9%, and Chevron, trading up 1.2% on the day.
VIDEO: Dow Movers: HON, BA
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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2023-12-08
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CVX
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Friday, December 8, 2023
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Chevron Corp. (CVX), SAP SE (SAP) and United Parcel Service, Inc. (UPS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Chevron’s shares have underperformed the Zacks Oil and Gas - Integrated - International industry over the past year (-11.9% vs. -0.5%). The company has grappled with the 2020 commodity price crash, leading to substantial spending cuts. Concerns include high sensitivity to oil prices and a 10-year reserve replacement ratio of 100%, indicating challenges in replenishing produced energy. Considering all these factors, investors are advised to wait for a better entry point.
Nevertheless, Chevron is positioned as one of the top global integrated oil firms, set for sustainable production growth, particularly due to its dominant position in the lucrative Permian Basin. Further, the recent acquisition of Hess Corp. is expected to significantly strengthen Chevron's presence in oil-rich Guyana.
(You can read the full research report on Chevron here >>>)
Shares of SAP have outperformed the Zacks Computer - Software industry over the year-to-date period (+56.3% vs. +55.2%). The company’s performance is benefiting from continued strength in its cloud business (especially the new Rise with SAP and Grow with SAP solutions) across all regions.
Momentum in SAP’s business technology platform, particularly the S/4HANA solution along with opportunities presented by proliferation of generative AI bode well. Management also reaffirmed its 2023 guidance as well as its long-term targets. Frequent product launches, and strategic acquisitions and collaborations are other tailwinds.
However, continued softness in the Software license and support business segment coupled with global macroeconomic weakness and geopolitical instability remain concerning. Also, increasing research & development costs, and stiff competition in the cloud space are headwinds.
(You can read the full research report on SAP here >>>)
Shares of United Parcel Service have underperformed the Zacks Transportation - Air Freight and Cargo industry over the past year (-8.4% vs. +6.7%). The company now expects revenues in 2023 to be between $91.3-$92.3 billion. The new forecast is not only below the previous outlook of around $93 billion but also much lower than 2022's actual figure.
Management trimmed its revenue forecast for the full year due to weak e-commerce delivery demand and lost clients during the turbulent labor negotiations. The five-year deal with the International Brotherhood of Teamsters for better pay and working conditions is worth less than $30 billion. It is likely to keep labor cost at high levels.
UPS is looking to drive growth in this uncertain scenario by improving efficiencies. Efforts to reward its shareholders also bode well for UPS stockholders. The company's strong free cash flow generating ability is encouraging and supports its shareholder-friendly activities.
(You can read the full research report on United Parcel Service here >>>)
Other noteworthy reports we are featuring today include Citigroup Inc. (C), Regeneron Pharmaceuticals, Inc. (REGN) and TransDigm Group Inc. (TDG).
Mark Vickery
Senior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Chevron (CVX) to Gain Guyana Foothold with Hess Buy
Solid Momentum in Cloud Business Driving SAP's Performance
UPS Banks on Dividends & Buybacks Amid Shipping Volume Woes
Featured Reports
Citigroup (C) Progresses on Strategic Sales Amid Rising Costs
Per the Zacks analyst, Citigroup's progress on the consumer banking business exit will help focus on core operations. Yet, revamping technology and risk management framework might elevate expenses.
Dupixent Profits Fuels Regeneron (REGN), Eylea Decline A Woe
Per the Zacks analyst, stellar performance of Dupixent fuel, REGN even as lead drug Eylea faces disruption. The company's progress with the oncology portfolio & other candidates is also impressiv
Norfolk Southern (NSC) Strong on Dividends Amid Volume Woes
The Zacks analyst likes the company's efforts to reward its shareholders. However, below-par volumes due to weak freight-demand scenario remain a concern.
YUM! Brands (YUM) Banks on Digital Efforts Amid High Costs
Per the Zacks analyst, YUM! Brands focus on digital initiatives and refranchising efforts bode well. However, challenging macro environment, high labor costs and commodity inflation are concerns.
Zscaler (ZS) Benefits From Acquisitions & Product Refreshes
Per the Zacks analyst, Zscaler is benefiting from its strategic acquisitions like Canonic Security and ShiftRight. Moreover, frequent product refreshes are helping it in gaining new customers.
GenAI-Enabled PCs to Aid HP (HPQ) Personal Systems Revenues
Per the Zacks analyst, growing interest in generative artificial intelligence-enabled PCs might give a fresh boost to HP's Personal Systems segment revenues in fiscal 2024 and beyond.
Cardinal Health's (CAH) Diverse Products Gives Competitive Edge
Per the Zacks analyst, Cardinal Health's diversified portfolio represents long-term opportunities. Its products provide the company with a competitive edge in the niche space with fierce competition.
New Upgrades
Solid Defense Budget, Air Travel to Benefit TransDigm (TDG)
Per the Zacks analyst, expansionary defense budgetary policy adopted by the U.S. administration should benefit TransDigm. Also recovering air travel should boost its commercial aftermarket revenues.
Strength in Intelligent Devices Unit Benefits Emerson (EMR)
Per the Zacks analyst, Emerson's Intelligent Devices unit is driven by strength in the measurement and analytical businesses due to strong demand in the hybrid and process end markets.
Abercrombie & Fitch's (ANF) Hollister Brand Exhibits Momentum
Per the Zacks analyst, Abercrombie & Fitch has been experiencing momentum in its Hollister label. In third-quarter fiscal 2023, the Hollister brand registered sales growth of 11% year over year.
New Downgrades
Rising Interest Rates to Hit SunPower's (SPWR) Bookings
Per the Zacks analyst, rising interest rates have led to increased solar installation expenses thereby impacting bookings for SunPower. This in turn may hurt its future revenue growth.
Weakness in Energy Systems Segment to Hurt EnerSys (ENS)
Per the Zacks analyst, EnerSys is experiencing weakness across its Energy Systems segment due to decrease in capital spending of the telecommunication and broadband customers.
Weak Premium Retention & High Debt Affect ProAssurance (PRA)
Per the Zacks analyst, volatility in ProAssurance's premium retention in physician business can hinder top-line growth. Also, a high debt level is concerning.
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.
Free: See Our Top Stock and 4 Runners Up >>
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
Citigroup Inc. (C) : Free Stock Analysis Report
Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
SAP SE (SAP) : Free Stock Analysis Report
Transdigm Group Incorporated (TDG) : 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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2023-12-08
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CVX
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By David French and Anirban Sen
Dec 8 (Reuters) - Endeavor Energy Partners is exploring a sale that could value the largest privately-held oil and gas producer in the Permian basin, the top U.S. oilfield, at between $25 billion and $30 billion, according to people familiar with the matter.
The sale would come almost 45 years after Texas oilman Autry Stephens started the company that would become Endeavor. The 85-year-old wildcatter has decided to capitalize on a wave of mega deals sweeping the sector, the sources said.
Stephens has asked JPMorgan Chase JPM.N bankers to prepare to launch a sale process for Endeavor in the first quarter of 2024, the sources said, cautioning no transaction is certain and asking not to be identified because the deliberations are confidential.
Stephens has considered offers from suitors for Endeavor in the past, including in 2018, Reuters has reported. He now wants to settle the company's future rather than let his estate decide after his death who it should sell it to, the sources said.
Endeavor and JPMorgan declined to comment.
The universe of potential deep-pocketed buyers for a company the size of Endeavor is limited. However, the consolidation wave hitting the industry, as producers seek to boost scale and lock up the best acreage, shows there would be appetite among the few.
In October, Exxon Mobil XOM.N clinched a $60 billion deal to buy Pioneer Natural Resources PXD.N and Chevron CVX.N announced a $53 billion agreement to buy Hess HES.N.
In these transactions, the acquirers are using their stock as currency, rather than tapping into their cash piles. This leaves them with sufficient financial firepower to bid for Endeavor, even as they try to complete and integrate these acquisitions. Exxon is familiar with Endeavor's operations because the two companies teamed up to drill on some of the latter's land until 2022.
ConocoPhillips COP.N completed in October a $2.7 billion deal to buy out a 50% stake in the Surmont oil sands project in Canada. It has also shown an interest in CrownRock, which is majority-owned by private equity firm Lime Rock Partners and led by another Texas wildcatter, Timothy Dunn, Reuters has reported. The sale process for CrownRock is ongoing.
It is unclear whether Exxon, Chevron or Conoco will pursue a bid for Endeavor. Exxon and Chevron declined to comment.
Stephens, a former appraisals engineer who became more known through his appearances on the TV documentary series Black Gold, grew Endeavor by acquiring the unloved acreage of his competitors and managing to extract oil and gas profitably.
To lower his production costs, Stephens created and used his own fracking, construction, trucking and other services companies.
Endeavor produced 331,000 barrels of oil equivalent in the second quarter of 2023, up 25% from the corresponding period in 2022, according to Fitch Ratings. The credit ratings agency projected last month that Endeavor will generate about $1 billion of free cash flow in 2024.
Top U.S. shale companies by operated production https://tmsnrt.rs/46S3udx
(Reporting by David French and Anirban Sen in New York; Editing by Susan Fenton and Marguerita Choy)
((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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2023-12-08
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CVX
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Chevron Corporation CVX faces increased risks in Venezuela as president Maduro threatens to annex the disputed Essequibo oil-rich region from neighboring Guyana, according to a report by Bloomberg.
Energy market observers are warning of potential significant consequences for Chevron if Maduro follows through on his threats. The Biden administration has reaffirmed its unwavering support for Guyana's sovereignty and pledged to conduct flight operations within the country. Analysts suggest that should Maduro's threats materialize, the United States might reimpose sanctions and revoke Chevron's special license to operate in Venezuela, a privilege granted recently.
In response to Maduro’s threat, Guyana is enhancing security measures, Brazil is increasing its military presence along the border and the United States is urging Venezuela to respect the territory as Guyana's until the dispute is settled in international court.
The timing of the dispute, ahead of a presidential election next year, adds a political dimension. The geopolitical tension coincides with the polls, indicating that Maduro's political opposition is leading. Analysts view the Essequibo threat as a political posturing aimed at rallying nationalist sentiments and bolstering support for the socialist government.
A Wood Mackenzie analyst Luiz Hayum provided insights, asserting that the referendum functioned as a display of backing for Maduro's policies and an effort to foster a sense of unity among voters. Nevertheless, he highlighted the unlikely scenario of the situation escalating into a widespread armed conflict.
Despite the potential risk to Chevron's investment in the oil fields off Guyana, analysts deem the likelihood of Venezuela taking over offshore production as low due to significant logistical challenges.
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 Viper Energy, Inc. VNOM. While Matador Resources sports a Zacks Rank #1 (Strong Buy), both Liberty Energy and Viper Energy 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%.
Viper Energy is a variable distribution MLP based in Midland, TX. It generates strong and steady royalty income from mineral interests in Eagle Ford and the Permian Basin. The business strategies of the partnership include acquiring mineral interests from third parties and the parent company.
VNOM’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 92.62%.
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.
Free: See Our Top Stock and 4 Runners Up >>
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
Matador Resources Company (MTDR) : Free Stock Analysis Report
Viper Energy Inc. (VNOM) : 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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2023-12-08
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CVX
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Energy stocks were advancing premarket Friday as the Energy Select Sector SPDR Fund (XLE) was gaining 0.8%.
The United States Oil Fund (USO) was 1.2% higher and the United States Natural Gas Fund (UNG) was up 0.2%.
Front-month US West Texas Intermediate crude oil was up 2.1% at $70.77 per barrel at the New York Mercantile Exchange. Global benchmark North Sea crude oil gained 2.2% to $75.70 per barrel, and natural gas futures were 0.2% higher at $2.59 per 1 million British Thermal Units.
Dynagas LNG Partners (DLNG) was declining by over 6% after it reported Q3 adjusted diluted earnings of $0.01, down from $0.04 a year earlier. One analyst surveyed by Capital IQ expected $0.11.
Permian Resources (PR) was up more than 1% after saying its Permian Resources Operating subsidiary priced a $500 million private placement of 7% senior notes due 2032.
Chevron (CVX) and Hess (HES) said in separate regulatory filings that they have received requests from the US Federal Trade Commission for additional information on their merger agreement. Hess was 0.6% higher and Chevron was advancing nearly 1% pre-bell.
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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2023-12-08
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CVX
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Adds background in paragraphs 2,4
Dec 8 (Reuters) - The U.S. Federal Trade Commission has sent a second request to Chevron CVX.N and Hess HES.N, for additional information and documentary materials related to their $53 billion deal, the companies said on Friday.
U.S. lawmakers have sought increased scrutiny by the FTC over multi-billion dollar deals. Last month, U.S. Senate Majority Leader Charles Schumer and 22 other Democratic senators had written to the agency saying such acquisitions could lead to higher prices for consumers.
The companies said they would respond to the request and cooperate with the FTC. The deal was announced in October.
Earlier this week, Exxon Mobil XOM.N and Pioneer Natural Resources PXD.N received similar requests from the FTC related to their $60 billion merger.
(Reporting by Sourasis Bose in Bengaluru; Editing by Arun Koyyur)
((Sourasis.Bose@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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2023-12-08
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CVX
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Eni SpA E and Repsol SA REPYY are engaged in advanced negotiations for new agreements with Venezuela, as the South American nation aims to reclaim its position as a significant global oil producer following the relaxation of U.S. sanctions, per a Bloomberg report.
The companies are finalizing the terms of contracts for their oil ventures with the state-owned Petroleos de Venezuela SA. A potential agreement is anticipated to be reached by the end of the year.
The European majors are aiming to secure exports from a crucial project that holds rights to the largest offshore gas field in South America. Additionally, they are seeking increased operational and financial controls in their ventures.
Eni and Repsol aim to follow Chevron Corp. CVX, which obtained a special license to recommence production in Venezuela in late 2022. CVX was granted a license to recommence oil production in Venezuela by the Biden administration after U.S. sanctions halted all drilling activities in the South American nation almost three years ago.
Chevron received a six-month license from the U.S. Office of Foreign Assets Control. The new policy authorizes the company to produce crude oil and petroleum products in its projects in Venezuela.
Given the market’s eagerness to increase oil supply from the nation possessing the world’s largest oil reserves, Venezuela is anticipated to not only boost production but also redirect a greater share of its existing production to U.S. refineries. This move could contribute to stabilizing gasoline prices within the United States, a crucial consideration as President Joe Biden seeks reelection in 2024.
In November, Repsol sent a negotiation team to Caracas to discuss contracts and explore options for accessing heavy crude for its Spanish refineries. Talks are likely to center on compromises benefiting both Repsol and PDVSA, including a review of PDVSA’s long-term debt for oil and gas sales.
Repsol operates four oil ventures, while Eni runs five in Venezuela. PDVSA has over 40 oil partnerships, with some companies suspending activities due to challenging business conditions.
Zacks Rank & Stocks to Consider
Eni currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following company that presently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Williams Companies WMB reported third-quarter 2023 adjusted earnings of 45 cents per share, which beat the Zacks Consensus Estimate of 40 cents. The guidance for the 2023 dividend increased 5.3% on an annualized basis to $1.79 per share from $1.70 in 2022.
Williams Companies’ debt maturity profile is in good shape, with its $4.5-billion revolver maturing in 2023. Williams is also paying its shareholders an attractive dividend yielding around 5%. Besides this, the company has a share repurchase program worth $1.5 billion, highlighting its commitment to shareholders.
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.
Free: See Our Top Stock and 4 Runners Up >>
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
Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
Eni SpA (E) : Free Stock Analysis Report
Repsol SA (REPYY) : 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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2023-12-08
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CVX
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For a span of nearly six decades, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett has been wowing Wall Street with his investing prowess. Despite being just as fallible as any other investor, the Oracle of Omaha and his team have overseen a nearly 20% annualized return since the mid-1960s. On an aggregate basis, we're talking about a gain for the company's Class A shares (BRK.A) of almost 4,400,000% since Buffett took over.
What's made this outperformance so incredible is that Buffett and his investment team, including the late Charlie Munger, have stuck to old-school principles to make their shareholders meaningfully richer for more than a half-century. They've predominantly invested in time-tested, brand-name companies with well-defined competitive advantages and strong management teams.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
But perhaps most important, the Oracle of Omaha and his team strongly believe in portfolio concentration. This is to say that an outsize percentage of invested assets should be put to work in their top investment ideas.
As of the closing bell on Dec. 1, 2023, 79% -- $286.3 billion -- of the $363 billion investment portfolio overseen at Berkshire Hathaway by Warren Buffett was invested in just six stocks.
1. Apple: $175,091,767,454 (48.2% of invested assets)
The largest holding in Berkshire Hathaway's portfolio, tech stock Apple (NASDAQ: AAPL), leaves no shred of doubt that the Oracle of Omaha prefers to concentrate his company's invested assets in his and his teams' top ideas. Apple accounts for almost half of Berkshire's invested assets.
What's made Apple such a popular investment is its cutting-edge innovation, which is led by the iPhone. Even though Apple wasn't the first company to introduce a 5G-capable smartphone, it quickly gobbled up more than half of U.S. smartphone market share once a 5G-capable iPhone hit stores during the fourth quarter of 2020.
Arguably even more exciting is Apple's ongoing shift to a subscription-driven platform. To be clear, it's not giving up on the physical products (iPhone, Mac, and iPad) that brought it fame. Rather, it's evolving as a company to support various services that'll further enhance its operating margin, drive improved customer loyalty, and smooth out the revenue fluctuations that typically accompany major iPhone replacement cycles.
For Buffett, Apple's biggest selling point might just be its market-leading capital-return program. Apple is dishing out $15 billion in dividends to its shareholders each year, and it's repurchased more than $600 billion worth of its common stock since the beginning of 2013.
2. Bank of America: $31,977,098,106 (8.8% of invested assets)
If there's a sector Buffett is an expert on among all others, it's financials. He's an especially big fan of bank stocks, which benefit from disproportionately long periods of economic expansion. This is one reason why Bank of America (NYSE: BAC) accounts for nearly 9% of Berkshire's $363 billion of invested assets.
The factor that really helps Bank of America stand out from other U.S. money-center banks is its interest rate sensitivity. Changes in interest rates impact BofA's net interest income more so than any other big bank. With the Federal Reserve increasing the federal funds rate by 525 basis points since March 2022, Bank of America has seen its net interest income climb by billions of dollars every quarter, compared to where things stood a few years ago.
In addition to taking advantage of a higher-rate environment, BofA's technology investments are paying off. As of the end of September, 74% of its consumers were actively banking online or via mobile app, with a notable uptick in loan sales completed digitally, compared to prior to the COVID-19 pandemic. Digital transactions are considerably cheaper for banks than in-person interactions.
Bank of America is cheap, too. It can be scooped up right now for 5% below its book value and is doling out a market-topping 3.1% yield.
3. American Express: $26,343,875,232 (7.3% of invested assets)
It's a fairly similar story for the No. 3 holding, credit services provider American Express (NYSE: AXP). Since recessions are short-lived, companies reliant on merchant fees and interest income tend to disproportionately benefit from long-winded expansions.
The proverbial ace in the hole for Amex is that it's able to play both sides of a transaction. It's the third-largest payment processor in the U.S., based on credit card network purchase volume, and is also able to collect annual fees and interest income from its cardholders (consumers and businesses). Being able to double-dip can really lift American Express' bottom line during periods of robust economic growth.
Something else working in Amex's favor is its propensity to attract high-earning cardholders. People with higher incomes are less likely to alter their spending habits when inflation rises or an economic downturn takes shape. In other words, American Express' clients are more likely to continue paying their bills. In theory, this should help Amex better navigate challenging economic climates.
Patience has also paid off for Buffett. Berkshire Hathaway has an exceptionally low cost basis of approximately $8.49 per share on Amex. Based on Amex's base dividend of $2.40 per share, Buffett's company is enjoying a hearty 28.3% annual yield on cost.
Image source: Coca-Cola.
4. Coca-Cola: $23,456,000,000 (6.5% of invested assets)
No company has been a continuous holding in Berkshire Hathaway's portfolio longer than beverage stock Coca-Cola (NYSE: KO) -- since 1988. Coca-Cola has also increased its base annual dividend for 61 consecutive years (and counting), and it's netting Buffett's company a jaw-dropping 56.7% yield on cost.
The lure of Coca-Cola is that it's a consumer staples company. Consumers are going to buy food and beverages no matter how well or poorly the U.S. or global economy perform. Coca-Cola itself has more than two dozen brands generating at least $1 billion in annual sales. This translates to highly predictable sales and operating cash flow for the company in any economic climate.
To add to the above, Coca-Cola is operating in all but three countries (North Korea, Cuba, and Russia). Having such globally diverse operations allows it to generate steady cash flow in developed countries, while relying on faster organic growth rates in emerging markets.
Credit should be given to Coca-Cola's top-notch marketing, too. It's successfully reaching new generations of consumers with digital ad campaigns, yet has had no trouble maintaining its engagement with more mature audiences via well-known brand ambassadors.
5. Chevron: $15,965,054,730 (4.4% of invested assets)
Prior to the start of the decade, energy stocks were mostly an afterthought for the Oracle of Omaha and his investment team. But that's changed in a big way, as evidenced by the nearly $16 billion that's currently being put to work in integrated oil and gas stock Chevron (NYSE: CVX).
An investment of this magnitude is a pretty clear indication that Berkshire's brightest minds believe the spot price of crude oil will head higher, or at the very least remain well above its historic norm. Russia's ongoing war with Ukraine, coupled with years of capital underinvestment from energy companies due to pandemic-related uncertainty, has led to tight supply in the global oil market. As long as supply remains somewhat constrained, there's reason to believe the spot price for crude oil will be elevated.
Although Chevron generates its juiciest margins from its drilling operations, it's also able to hedge weakness in crude pricing with its other segments. For instance, Chevron's downstream refineries and chemical plants will enjoy lower input costs if the spot price of crude oil declines. This added cash flow can help Chevron weather any short-lived turbulence.
Big oil companies are known for their hefty capital return programs as well. Earlier this year, Chevron's board OK'd an up to $75 billion share repurchase program, which came on the heels of the company's 36th consecutive annual dividend increase.
Higher West Texas Intermediate crude oil prices have been a boon for Occidental Petroleum. WTI Crude Oil Spot Price data by YCharts.
6. Occidental Petroleum: $13,416,241,918 (3.7% of invested assets)
The sixth stock that, along with Apple, BofA, Amex, Coca-Cola, and Chevron, collectively accounts for 79% of the portfolio Buffett oversees at Berkshire Hathaway is yet another oil and gas stock, Occidental Petroleum (NYSE: OXY).
The Oracle of Omaha and his team have dived headfirst into Occidental common stock since the start of 2022. More than 228 million shares have been purchased, which comes atop the preferred stock yielding 8% annually that Berkshire has owned in Occidental Petroleum since 2019.
Though the catalysts for Occidental Petroleum mirror those of Chevron, there are two key differences between these two oil and gas companies. The first can be found with their balance sheets. Whereas Chevron has one of the lowest debt-to-equity ratios among major oil and gas companies, Occidental is still mired in debt following its purchase of Anadarko in 2019. It'll need energy commodity prices to remain elevated in order to continue improving its financial flexibility.
The other big difference between Chevron and Occidental is the latter's reliance on drilling. Although both are integrated operators (Occidental operates chemical plants), Occidental Petroleum generates an outsize percentage of its revenue and operating cash flow from its drilling operations, when compared to Chevron. If the spot price for crude rises, Occidental should disproportionately benefit. But the opposite is also true: A declining spot price for crude oil will hurt Occidental's cash flow more than most drillers.
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American Express and Bank of America are advertising partners of The Ascent, a Motley Fool company. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool recommends Chevron and Occidental Petroleum and recommends the following options: long January 2024 $47.50 calls on Coca-Cola. 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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2023-12-08
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CVX
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By MacDonald Dzirutwe
LAGOS, Dec 8 (Reuters) - The Dangote oil refinery in Nigeria on Fridayreceived its first cargo of 1 million barrels of crude oil from Shell International Trading and Shipping Co (STASCO), bringing the start of operations closer after years of delays.
Once fully running, the 650,000 barrel-per-day refinery funded by Africa's richest man Aliko Dangote will turn oil powerhouse Nigeria into a net exporter of fuels, a long-sought goal for the OPEC member that almost totally relies on imports.
Dangote Group said in a statement seen by Reuters on Friday that the cargo of 1 million barrels of crude from Agbami - a deep water field run by Chevron CVX.N - was the first of 6 million barrels that would enable an initial run of the refinery.
That will kick-start output of diesel, aviation fuel and Liquefied Petroleum Gas, before the refinery later starts producing Premium Motor Spirit.
A Dangote Group spokesperson said the STASCO cargo arrived on a chartered vessel and was discharged into the refinery's crude oil tanks.
The next four cargoes will be supplied by state oil firm NNPC in two to three weeks and a final cargo will come from ExxonMobil XOM.N, Dangote Group's statement said.
Nigeria's state oil firm NNPC Ltd signed an agreement in November to supply the Dangote refinery with up to six cargoes of crude starting this month. NNPC has a 20% stake in the refinery.
Despite being Africa's biggest oil producer, Nigeria experiences repeated fuel shortages. It spent $23.3 billion last year on petroleum product imports and consumes around 33 million litres of petrol a day.
"Our focus over the coming months is to ramp up the refinery to its full capacity," Dangote was quoted as saying in the statement.
Nigeria commissioned the refinery in May, after it ran years behind schedule. At a cost of $19 billion, the massive petrochemical complex is one of Nigeria's single largest investments.
(Reporting by MacDonald Dzirutwe Writing by Bhargav Acharya Editing by Alexander Winning, Barbara Lewis and Louise Heavens)
((Bhargav.Acharya@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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2023-12-07
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CVX
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JAKARTA, Dec 8 (Reuters) - Indonesia state energy firm Pertamina PERTM.UL has started an underground carbon injection trial in Sukowati field, the second site the company is testing for carbon capture, utilization and storage (CCUS).
The "huff and puff" tests started on Thursday with the injection of as much as 500 tons of CO2 into the Sukowati-18 well in Sukowati field in East Java province, the company said in a statement late on Thursday.
"The CO2 enhanced oil recovery hopefully can boost output in Sukowati," said Pertamina Hulu Energi development and production director, Awang Lazuardi. The field produced around 5,000 barrels of oil per day (bpd) before the trial.
Huff and puff is an enhanced oil recovery technique that can raise oil output by increasing the pressure of a reservoir.
Pertamina worked with Japan Oil, Gas and Metals National Corporation (JOGMEC) and Japan Petroleum Exploration Company Limited (JAPEX) to carry out the CCUS tests in Sukowati field.
Pertamina aims to cut its greenhouse gas emissions by 30% by 2030 and has been exploring CCUS technology with several partners including Exxon MobilXOM.N and ChevronCVX.N to offset emissions and boosts its oil and gas production.
Aside from the trials in Sukowati and Jatibarang field, Pertamina is looking to develop carbon capture and storage (CCS) or CCUS in six other locations in Indonesia.
The energy ministry is drafting a regulation on CCS and CCUS implementation to encourage oil and gas operators to install carbon capture facilities at their operations by making them commercially viable.
(Reporting by Bernadette Christina; Editing by Tom Hogue)
((Bernadette.Christina@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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2023-12-07
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CVX
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Let’s address the giant pink elephant in the room regarding oil stocks to buy: hydrocarbon prices are falling like a rock. According to a recent CNBC article, U.S. crude oil fell below $70 a barrel, closing at the lowest level since June. Also, Axios pointed out that record domestic oil production helped spark the sector-wide deflation.
So, it then leads to an obvious question: why bother with oil stocks to buy? On relative financial/investment terms, hydrocarbon players are undervalued. Yes, we can talk all day about renewable energy solutions. However, fossil fuels leverage the incredible scientific power of energy density. That will never go away unless the laws of physics somehow shift.
Fundamentally, though, the geopolitical environment continues to worsen. To be fair, major oil producing nations standing ready to deepen production cuts in the first quarter of 2024 haven’t resulted in much of an upward shock in prices. However, I also believe you’ve got to look at the long game.
Obviously, the situation in the Middle East is tense, sparking ideological conflicts throughout the world. Also, Russia’s invasion of Ukraine shows no sign of abating. With headwinds stubbornly marching higher, speculators may want to consider the below oil stocks to buy.
Chevron (CVX)
Source: Sundry Photography / Shutterstock.com
At the moment, Chevron (NYSE:CVX) might not appear a viable candidate for oil stocks to buy. Since the beginning of the year, CVX fell 18%. Since Oct. 19, the situation hasn’t look auspicious for the integrated oil giant. However, I’m going to step away from the noise and take a look at what the alpha dogs of Wall Street think. After all, they move the market – not some random voice on the internet.
Interestingly, Fintel’s options flow screener – which targets exclusively big block transactions likely made by institutions – reveals recent acquisitions of sold puts. In particular, a major entity or entities sold 6,800 contracts of the Jan 19 ’24 170.00 Put. For those unfamiliar with the lexicon, the trade (at face value) assumes that by the expiration date of Jan. 19, 2024, CVX will not materially drop below the $170 strike price.
Yes, CVX closed at $142.53 on Wednesday. However, the option trader collected a premium of $11.925 million for underwriting the risk. Therefore, as long as CVX doesn’t dip meaningfully below the $143.515 transaction price, the trader will win. That’s a bold bet that may augur well for Chevron.
ConocoPhillips (COP)
Source: JHVEPhoto / Shutterstock.com
A multinational corporation focused on hydrocarbon exploration and production (upstream), ConocoPhillips (NYSE:COP) admittedly seems risky as a candidate for oil stocks to buy. True, the year-to-date loss of a bit over 2% seems relatively reasonable. However, in the past five sessions, COP dropped almost 5% of equity value. Still, it might be worth keeping on your radar due to a possible short-covering mechanism materializing.
From late November to Wednesday, institutional investors have been selling COP call options. The underlying strike prices range between $116 at the low to $120 at the high. It’s hard not to notice that these are fairly aggressive wagers. Keep in mind that COP closed the midweek session at $110.52. Yes, momentum is negative, which is likely what inspired the bearish trades. Still, it’s risky.
Basically, the difference between the current price and the high-side strike is about 8.6%. So, a sudden surge in sentiment could see options traders cover their short calls, which may be bullish for COP. Also, it’s not always a great idea to short a security which features a strong buy rating.
Williams (WMB)
Source: rafapress / Shutterstock.com
A midstream operator, Williams (NYSE:WMB) on paper makes a solid investment under any circumstance. No, it’s never purely insulated from economic forces obviously. However, as it’s heavily involved in energy storage and transportation services, it’s the lifeblood of the economy. That’s probably not going to change anytime soon given the aforementioned energy density of fossil fuels. For that reason, it’s one of the oil stocks to buy.
Further, Wall Street appears to agree, sending WMB up more than 11% since the January opener. However, it’s also possible that further gains can materialize. Looking at the security’s options flow, we find that bears have apparently targeted WMB for future declines. Specifically, a major entity (or entities) sold 27,014 contracts of the Jan 19 ’24 32.00 Call on Wednesday. At the time of the transaction, shares traded for $35.87.
That seems awfully aggressive given the premium paid of $1.14 million. Yes, WMB slipped recently, which likely inspired the bearish wager. Still, a few good sessions may be enough to spark a short covering.
Kinder Morgan (KMI)
Source: JHVEPhoto/Shutterstock.com
Another top-flight midstream operator, Kinder Morgan (NYSE:KMI) benefits from the same fundamentals as Williams. Basically, Kinder represents a vital component of the economy thanks to its vast network of pipelines and terminals. However, it’s relatively undervalued compared to WMB, with shares down almost 3% since the January opener. Is that enough to make it one of the oil stocks to consider?
To be upfront, Kinder Morgan represents a tricky proposition. It’s true that bears are betting against KMI. However, recent transactions show that institutional traders are buying puts instead of selling calls. At face value – assuming that these trades aren’t part of a complex, multi-tiered strategy – the bought puts don’t have an obligatory consequence; that is, one “merely” loses the principle in buying the puts.
However, what’s interesting is that the implied volatility (IV) curve of KMI shows heightened interest in far out-the-money (OTM) calls. That’s unlike many other oil stocks, which feature heightened IV toward the deep in-the-money (ITM) calls. So, options traders could be anticipating upside, which may upset the bears.
Phillips 66 (PSX)
Source: Jonathan Weiss / Shutterstock.com
Although Phillips 66 (NYSE:PSX) represents a laggard among downstream operators, it enjoys one major catalyst: the attention of Paul Singer of Elliott Management. As I reported earlier, the activist investor bought up a significant stake in PSX stock. In turn, it’s urging for significant changes to help unlock value. So far, the pressure seems to be working. Since the start of the year, PSX gained nearly 24%.
Conspicuously, in the trailing month, PSX returned about 10% of equity value, delighting patient long-term stakeholders. Even better, it’s quite possible that shares can continue their impressive rally. Yes, the spotlight from Elliott Management undoubtedly inspires the wheels to turn faster. However, sold calls that were placed months ago now risk getting blown up. If the bears don’t cover, they could face financial consequences.
Interestingly, other institutional bears seem unperturbed with the rise of Phillips 66. On Dec. 1, major entities sold 3,416 contracts of the Feb 16 ’24 135.00 Call. That seems a risky bet because the delta between the strike and Wednesday’s close is only 8%.
Valero Energy (VLO)
Source: Sundry Photography / Shutterstock.com
Another downstream petroleum company, Valero Energy (NYSE:VLO) focuses primarily on manufacturing and marketing transportation fuels and other petrochemical products. Since the start of the year, VLO moved up modestly, a bit over 2%. However, in the trailing five sessions, VLO slipped almost 2%. With circumstances not working in Valero’s favor (given the record domestic production), the bears put VLO in their crosshairs.
If we learned anything from the post-Covid-19 market ecosystem, you can never be too comfortable holding a bearish position. Nevertheless, some institutional investors are throwing caution to the wind. On Tuesday, a major trader bought 1,006 contracts of the Dec 15 ’23 120.00 Put. But the real star of the show when it comes to pessimism is the 1,001 contracts sold of the Jun 21 ’24 120.00 Call.
At the time of the transaction (on Nov. 20), VLO traded hands at $124.79 per share. As of Wednesday’s close, the price slipped to $122.73 so the bear is winning for now. However, all it takes is a bit of positive momentum to return and this bear trade could get blown up.
HighPeak Energy (HPK)
Source: Oil and Gas Photographer / Shutterstock.com
An independent oil and natural gas company engaged in the acquisition, development, and production of various hydrocarbon reserves, HighPeak Energy (NASDAQ:HPK) offers a relevant business on paper. However, in reality, it’s one of the riskiest oil stocks. Since the beginning of the year, shares lost almost 38% of their equity value. In the trailing five sessions, they slipped almost 10%.
That about tells you all you need to know about HighPeak. Nevertheless, for contrarian speculators, the narrative could be enticing. First, according to Fintel’s options flow screener, an institutional investor bought 931 contracts of the Jan 19 ’24 17.50 Call, paying a premium of $24,450 in the process. That’s arguably a reasonable OTM bet considering that shares closed at $14.46 on Wednesday.
Second, HPK might be a short squeeze in the making. Per Fintel, HPK’s short interest stands at 24.76% of its float. Moreover, its short interest clocks in at 12.55 days to cover. That means that based on average trading volume, the bears will require almost 13 business days to unwind their wagers.
All it takes is a nudge and the pessimists could be having a bad day.
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 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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2023-12-07
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CVX
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Investors in Chevron Corporation (Symbol: CVX) saw new options begin trading today, for the January 2024 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the CVX options chain for the new January 2024 contracts and identified one put and one call contract of particular interest.
The put contract at the $135.00 strike price has a current bid of $1.32. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $135.00, but will also collect the premium, putting the cost basis of the shares at $133.68 (before broker commissions). To an investor already interested in purchasing shares of CVX, that could represent an attractive alternative to paying $143.81/share today.
Because the $135.00 strike represents an approximate 6% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.98% return on the cash commitment, or 7.14% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Chevron Corporation, and highlighting in green where the $135.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $145.00 strike price has a current bid of $3.85. If an investor was to purchase shares of CVX stock at the current price level of $143.81/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $145.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.50% if the stock gets called away at the January 2024 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if CVX shares really soar, which is why looking at the trailing twelve month trading history for Chevron Corporation, as well as studying the business fundamentals becomes important. Below is a chart showing CVX's trailing twelve month trading history, with the $145.00 strike highlighted in red:
Considering the fact that the $145.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.68% boost of extra return to the investor, or 19.54% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today's price of $143.81) to be 24%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
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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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2023-12-07
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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.
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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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2023-12-07
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CVX
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Energy stocks were advancing premarket Thursday with the Energy Select Sector SPDR Fund (XLE) up 0.4% recently.
The United States Oil Fund (USO) was 1.3% higher and the United States Natural Gas Fund (UNG) was down 0.4%.
Front-month US West Texas Intermediate crude oil was up 1.3% at $70.31 per barrel at the New York Mercantile Exchange. Global benchmark North Sea crude oil gained 1.2% to $75.21 per barrel, and natural gas futures were 0.1% lower at $2.57 per 1 million British Thermal Units.
Talos Energy (TALO) was gaining over 5% in value after saying it continues to expect Q4 average production of 66,500 to 68,500 barrels of oil equivalent per day.
Chevron (CVX) was slightly higher after saying it expects organic capital expenditure between $15.5 billion and $16.5 billion for consolidated subsidiaries and an affiliate capital expenditure budget of roughly $3 billion for 2024.
Woodside Energy Group (WDS) and Santos are in preliminary discussions over a potential merger, the companies said in separate statements in response to media speculation. Woodside Energy Group was marginally advancing pre-bell.
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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2023-12-07
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CVX
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Oil and natural gas are inherently volatile commodities that are increasingly facing headwinds from a world that is looking to reduce its reliance on carbon fuels. The importance of oil to the world economy, however, suggests that any transition away from this energy source will be decades long, so investors probably shouldn't run for the hills. But the changing energy landscape does mean that you need to take a more considered view of the oil stocks you choose to buy. Three options to think about in December are Chevron (NYSE: CVX), TotalEnergies (NYSE: TTE), and Devon Energy (NYSE: DVN).
Chevron is focused on being reliable
Chevron is what is known as an integrated energy company, which means its business spans the entire oil and natural gas value chain. That helps to smooth out financial performance in an industry known for being volatile since some areas (refining, for example) can benefit when oil prices are low. On top of that diversification, Chevron also has one of the strongest balance sheets among its closest peer set, with an ultralow debt-to-equity ratio of 0.12 times.
However, the energy giant's biggest claim to fame is probably its 36 consecutive annual dividend increases. That record has been achieved despite the inherently cyclical nature of the industry, which is fairly impressive. The dividend yield is around 4.1% today. The combination of yield, dividend consistency, and financial strength is the kind of thing that conservative dividend investors should find attractive in a volatile sector like energy. And while the long-term shift toward clean energy is a worry, $270 billion market cap Chevron has the wherewithal to buy its way into the renewable power business when management believes the time is right.
TotalEnergies is transitioning with the world today
French TotalEnergies is another integrated energy giant, with operations that span the oil and natural gas value chains. It has a yield of around 4.6%. While it doesn't boast the same annual dividend growth streak as Chevron, it has a dividend story to tell. Like European peers BP (NYSE: BP) and Shell (NYSE: SHEL), TotalEnergies announced plans to start investing in clean energy. Unlike BP and Shell, however, it didn't cut its dividend when it made that announcement, stating that the board recognizes that investors value the income the stock generates for them.
The company's game plan is to use oil profits to invest in cleaner alternatives, including solar, wind, and electricity. Those businesses make up nearly 7.5% of business segment operating income today. But the approach here is a multistep process, with the company also looking to focus around its best oil assets while increasing exposure to natural gas, which is cleaner-burning and considered a transition fuel. But the big story for investors is that TotalEnergies provides exposure to carbon fuels and to clean energy. If you are looking to hedge your energy bets, it is a solid option.
Devon Energy goes all in on oil
At the other extreme from TotalEnergies is Devon Energy, a focused oil and natural gas producer with a U.S. footprint. There are a number of positives here, including a low break-even price point of around $40 per barrel of oil and an inventory of future drilling opportunities over a decade long. Generally speaking, it is a well-run energy producer. The wrinkle here is that oil and natural gas prices are the main driving force of the company's financial results, so the top and bottom line are often very volatile.
If you are looking for direct exposure to energy, this could be the stock for you. But there's more. Devon Energy's dividend is variable and tied to its financial performance. That means that the dividend is likely to rise when oil prices rise and, on the flip side, fall when oil prices fall. So there's an even greater tie to oil than meets the eye. Investors who are interested in a consistent dividend will probably want to avoid this stock, but those seeking to hedge real-world energy costs might find it quite appealing. The yield today is 6.3%, but given the variable nature of the dividend, that's not a figure you should focus on too much.
Three different ways to invest in energy
There's no right way to invest and there's no perfect stock for every investor. That's particularly true in the energy patch, which is going through some big changes today. Conservative dividend investors will probably like financially strong industry giant Chevron, while those seeking to hedge their bets with a clean energy twist might prefer TotalEnergies. And for those that simply want to go all in on oil and natural gas, well, Devon Energy is very close to a pure play in the energy space.
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*Stock Advisor returns as of December 4, 2023
Reuben Gregg Brewer has positions in TotalEnergies Se. The Motley Fool has positions in and recommends BP. 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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2023-12-06
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CVX
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In early trading on Wednesday, shares of Caterpillar topped the list of the day's best performing Dow Jones Industrial Average components, trading up 1.2%. Year to date, Caterpillar registers a 7.8% gain.
And the worst performing Dow component thus far on the day is Chevron, trading down 0.6%. Chevron is lower by about 20.9% looking at the year to date performance.
Two other components making moves today are Verizon Communications, trading down 0.5%, and Boeing, trading up 0.8% on the day.
VIDEO: Dow Movers: CVX, CAT
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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2023-12-06
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CVX
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(RTTNews) - Chevron Corp. (CVX) announced an expected organic capital expenditure range of $15.5 to $16.5 billion for consolidated subsidiaries and an affiliate capital expenditure budget of about $3 billion for 2024.
Upstream spending in 2024 is expected to be about $14 billion. Downstream capex is expected to be roughly $1.5 billion, with 80 percent allocated to the United States.
With the acquisition of PDC Energy, Chevron announced an annual capex guidance range of $14 to $16 billion through 2027. On October 23, 2023, Chevron announced that it had entered into an agreement to acquire Hess Corporation.
The acquisition is expected to close in the first half of 2024. Following closing of the acquisition, Chevron's annual capex budget is expected to be between $19 billion and $22 billion.
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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2023-12-06
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CVX
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Chevron Corp. (CVX) shares closed today at 1.5% above its 52 week low of $140.26, giving the company a market cap of $269B. The stock is currently down 17.5% year-to-date, down 13.9% over the past 12 months, and up 53.2% over the past five years. This week, the Dow Jones Industrial Average rose 1.9%, and the S&P 500 rose 0.0%.
Trading Activity
Trading volume this week was 64.5% higher than the 20-day average.
Beta, a measure of the stock’s volatility relative to the overall market stands at 0.6.
Technical Indicators
The Relative Strength Index (RSI) on the stock was between 30 and 70.
MACD, a trend-following momentum indicator, indicates an upward trend.
The stock closed below its Bollinger band, indicating it may be oversold.
Market Comparative Performance
The company's share price is the same as the S&P 500 Index , lags it on a 1-year basis, and lags it on a 5-year basis
The company's share price is the same as the Dow Jones Industrial Average , lags it on a 1-year basis, and lags it on a 5-year basis
The company share price is the same as the performance of its peers in the Energy industry sector , lags it on a 1-year basis, and beats it on a 5 year basis
Per Group Comparative Performance
The company's stock price performance year-to-date lags the peer average by -277.4%
The company's stock price performance over the past 12 months lags the peer average by -221.9%
The company's price-to-earnings ratio, which relates a company's share price to its earnings per share, is 32.1% higher than the average peer.
This story was produced by the Kwhen Automated News Generator. For more articles like this, please visit us at finance.kwhen.com. Write to editors@kwhen.com. © 2020 Kwhen Inc.
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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2023-12-06
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CVX
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By Sabrina Valle
Dec 6 (Reuters) - Oil major Chevron Corp CVX.N said on Wednesday that it expects to spend between $18.5 billion and $19.5 billion next year on new oil and gas projects, an 11% increased compared to this year.
Its 2024 budget and that of Exxon Mobil reflect the industry's continuing rebound after pandemic-influenced pullbacks last decade, recent acquisitions and carbon reduction initiatives. Exxon outlined its plan to spend between $22 billion and $27 billion annually through 2027.
While both are spending more, the combined sums are less than half the combined $84 billion Exxon and Chevron spent in 2013, when oil prices often traded above $100 per barrel. The two are benefiting from higher energy prices and pandemic cost-cuts.
Chevron's figure excludes any impact from its proposed acquisition of rival Hess Corp HES.N. That deal, which is expected to close next year, will push capital expenditures to between $19 billion and $22 billion, it said.
Chevron in October agreed to buy Hess for $53 billion in stock to gain a bigger U.S. oil footprint and a stake in rival Exxon Mobil's XOM.N massive Guyana offshore oil discoveries.
Wednesday's disclosures did not include a new forecast for oil production next year. Chevron previously said the two deals would bring total oil and gas output to about 3.7 million barrels per day.
Chevron plans to spend about $9 billion of its current budget in the U.S., as oil companies move investments to the Americas to reduce costs and pare geopolitical risks.
Of the total projected budget, about $5 billion will be devoted to its fast-growing Permian shale production operation, and another $1.5 billion to other shale and tight oil businesses. The shale and tight oil spending increases reflect its acquisition of PDC Energy earlier this year.
Projects in the Gulf of Mexico will take up about $3.5 billion, with production from a new oil platform, Anchor, expected to start next year.About 80% of its expenditures next year on refining and chemicals will also be in the U.S., it said.
The company intends to increase share repurchases by $2.5 billion to the top end of its guidance range of $20 billion per year once the Hess deal closes.
Nearly half of a $3 billion budget for its affiliates are planned for the company's Tengizchevroil project in Kazakhstan, it said.
(Reporting by Arunima Kumar in Bengaluru and Sabrina Vale in Houston; Editing by Shailesh Kuber)
((Arunima.Kumar@thomsonreuters.com; Twitter: https://twitter.com/Aru_Kumar94 ;))
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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2023-12-06
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CVX
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By Marianna Parraga
HOUSTON, Dec 6 (Reuters) - Venezuelan state oil company PDVSA has assigned loading windows this month to two vessels bound for India under crude spot deals with Italy's ENI ENI.MI and U.S.-based Chevron >, an internal company document showed.
Indian refiners including Reliance Industries RELI.NS, Indian Oil Corp IOC.NS and HPCL-Mittal Energy (HMEL) have been looking for Venezuelan crude cargoes to buy since Washington eased oil sanctions on the South American country in October.
Some refiners have agreed to purchase deals with trading houses that had early access to Venezuelan oil between October and November, while others are set to buy from PDVSA's joint venture partners.
The scheduled deliveries to India are the first authorized by PDVSA through oil majors' Eni and Chevron in three years.
The two vessels to load for India are the Liberia-flagged supertanker C. Earnest, which arrived in Venezuelan waters on Wednesday chartered by Reliance, and the Malta-flagged supertanker Desimi, which has been waiting to load since last week, according to the document and ship tracking data.
Each can transport up to 2 million barrels of Venezuela's prized heavy crude oil.
A separate crude cargo on the very large crude carrier Eucaly, sold by PDVSA to intermediary Hangzhou Energy, finished loading last week and could also set sail to India if a deal through a trading firm and an Indian refiner is confirmed. The cargo had initially been allocated for Malaysia, another document showed.
Venezuelan oil sales to India got suspended in 2020 when the U.S. imposed secondary sanctions on the nation. Reliance was PDVSA's second largest individual customer prior to sanctions.
Taking cargoes from Venezuela largely depends on the buyers' ability to charter tankers that agree to load at Venezuelan ports, where delays and quality issues are common, and their willingness to pay upfront, as demanded by PDVSA.
Venezuela's oil exports to China, its primary destination for exports, averaged some 338,000 barrels per day (bpd) last month, while shipments to the United States averaged 144,000 bpd, according to the documents and data.
(Reporting by Marianna Parraga; editing by Gary McWilliams)
((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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2023-12-06
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CVX
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Apple (NASDAQ:AAPL) was the first company to reach $1 trillion in market capitalization in 2018. Value creation has continued, with its market valuation topping $3 trillion in June 2023. Apple is a good example of stories driven by innovation that are a buy-and-hold forever. While AAPL stock remains interesting, I am on the lookout for the next trillion-dollar companies. Without a doubt, there will be major growth stories in the coming years that will translate into a surge in market valuation.
It won’t be just companies with sizzling growth entering the trillion-dollar club. There will be blue-chip stocks that gradually create value. This column focuses on these stocks with an investment horizon of five years.
A key screener is the cash flow potential. Ultimately, valuation depends on the company’s ability to generate cash. Apple’s core business is a cash flow machine allowing it to invest in dividends, share repurchases, acquisitions and product development.
Let’s talk about three potential trillion-dollar companies.
Chevron (CVX)
Source: Denis Kuvaev / Shutterstock.com
There is no doubt that policymakers globally are focusing on green energy. However, it’s too early to declare that the days of fossil fuel are over. Also, crude has declined due to sluggish global growth. With potential rate cuts impending next year, buying oil and gas stocks is a good opportunity. Chevron (NYSE:CVX) is one stock likely to create immense value.
After a decline of 18% year-to-date, CVX stock looks undervalued. Further, the stock offers a dividend yield of 4.17%. Given the company’s low break-even assets and ability to generate strong cash flows, I am currently bullish.
To put things into perspective, Chevron reported operating cash flow of $9.7 billion for Q3 2023. This translates into an annual cash flow potential of $40 billion. Additionally, cash flows will swell with the impending acquisition of Hess Corporation (NYSE:HES). After the acquisition, Chevron expects an annual capital expenditure of $19 billion to $22 billion. These investments will translate into production growth and further upside in free cash flows.
Salesforce (CRM)
Source: Sundry Photography / Shutterstock.com
Salesforce (NYSE:CRM) stock has surged by 86% year-to-date. However, valuations look reasonable, with the stock trading at a forward price-earnings ratio of 30.7. Salesforce has a big addressable market, ample headroom for growth, and has delivered healthy cash flows.
As an overview, Salesforce describes itself as the leading AI-driven customer relationship management company. By 2026, Salesforce believes its solutions will have a total addressable market of $290 billion. With presence across industries and geographic diversification, the growth outlook is robust.
For Q3 2023, Salesforce reported healthy revenue of $8.72 billion, and the outlook for Q4 is also positive. However, I want to focus on the cash flows. For the year’s first nine months, Salesforce reported operating cash flow of $6.8 billion. This implies an annual OCF potential of $9 billion. Further, the company has cash and equivalents of nearly $12 billion as of Q3. The cash flow potential and a healthy liquidity buffer provide scope for aggressive expansion and investment in product development.
Costco Wholesale (COST)
Source: ARTYOORAN / Shutterstock.com
Costco Wholesale (NASDAQ:COST) might race ahead of Walmart (NYSE:WMT) to become the first trillion-dollar retail stock. Of course, I am talking about traditional retail and not the likes of Amazon (NASDAQ:AMZN).
It’s worth noting that retail stocks have faced inflation-related challenges coupled with macroeconomic headwinds. However, COST stock has been a performer with an upside of 34% year-to-date. I expect strong comparable store sales growth to sustain the positive momentum.
An important point is that Costco has 738 warehouses in the United States, Canada and Mexico. Overall, the company has 861 warehouses globally. There is a significant concentration in North America. With just five warehouses in China, there is ample scope for expansion and growth.
Costco has also generated $4.6 billion in membership fees in the last 12 months. I expect recurring membership fees to swell further in the coming years. This will boost key margins and cash flows.
On the date of publication, Faisal Humayun did not hold (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.
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.
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The post Trillion-Dollar Aspirations: 3 Stocks With Sky-High Potential 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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2023-12-06
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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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2023-12-06
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CVX
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The SPDR S&P North American Natural Resources ETF is seeing unusually high volume in afternoon trading Wednesday, with over 135,000 shares traded versus three month average volume of about 27,000. Shares of NANR were off about 1.1% on the day.
Components of that ETF with the highest volume on Wednesday were Exxon Mobil, trading down about 1.9% with over 13.9 million shares changing hands so far this session, and Chevron, down about 0.5% on volume of over 7.9 million shares. Clear Channel Outdoor Holdings is the component faring the best Wednesday, up by about 3.7% on the day, while Canadian Natural Resources is lagging other components of the SPDR S&P North American Natural Resources ETF, trading lower by about 4.5%.
VIDEO: Wednesday's ETF with Unusual Volume: NANR
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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2023-12-06
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CVX
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Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the WisdomTree U.S. High Dividend ETF (DHS) is a smart beta exchange traded fund launched on 06/16/2006.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Wisdomtree, DHS has amassed assets over $1.07 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. DHS, before fees and expenses, seeks to match the performance of the WisdomTree U.S. High Dividend Index.
The WisdomTree U.S. High Dividend Index is a fundamentally weighted index that measures the performance of companies with high dividend yields selected from the WisdomTree Dividend Index.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for DHS are 0.38%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.38%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
DHS's heaviest allocation is in the Energy sector, which is about 19.90% of the portfolio. Its Financials and Utilities round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM) accounts for about 5.84% of total assets, followed by Chevron Corp (CVX) and Abbvie Inc (ABBV).
The top 10 holdings account for about 39.99% of total assets under management.
Performance and Risk
So far this year, DHS has lost about -4.28%, and is down about -5.72% in the last one year (as of 12/06/2023). During this past 52-week period, the fund has traded between $73.70 and $89.17.
The ETF has a beta of 0.81 and standard deviation of 14.60% for the trailing three-year period, making it a medium risk choice in the space. With about 382 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. High Dividend 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 $51.76 billion in assets, Vanguard Value ETF has $101.19 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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WisdomTree U.S. High Dividend ETF (DHS): ETF Research Reports
Chevron Corporation (CVX) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
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Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): 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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2023-12-06
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CVX
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By Curtis Williams
HOUSTON, Dec 6 (Reuters) - A Venture Global LNG export plant due to begin operating in 2024 will undergo a lengthy startup similar to its Calcasieu Pass LNG facility, with customers likely to receive their first cargoes in 2026 at the earliest, Chief Executive Mike Sabel told Reuters.
The nearly three-year commissioning at Calcasieu Pass prevented its original backers from obtaining any of the liquefied natural gas (LNG) cargoes shipped and has stirred a firestorm of accusations and arbitration claims from those customers.
The new Plaquemines LNG plant, which sits 20 miles (32km) south of New Orleans along the Mississippi River, includes some of the same customers that fiercely protested their inability to obtain their cargoes from Calcasieu Pass.
Asked whether Plaquemines' commissioning period would be as extended as the Calcasieu Pass plant's nearly 36 months, Sabel said "absolutely."
"Keep in mind our total timeline from FID (financial investment decision) to COD (commercial operation date) is shorter than most of the world," he added.
The earliest date that first cargoes are available to long-term contract customers is 2026 or 2027, but Venture Global expects to sell commissioning cargoes in 2024.
Venture Global LNG has said its contracts give it sole authority to determine when a facility is commercial.
The company has said equipment problems at the first plant have prevented it from reaching full commercial production, allowing it to withhold cargoes from big name contract customers including BP BP.L, Edison EDNn.MI, Repsol REP.MC, Shell SHEL.L and others, and sell them as commissioning cargoes.
Customers claim Venture Global LNG has deprived them of tens of billions of dollars in LNG sales at a time when global prices were much higher than what they were promised. Sabel said the companies knew Venture Global's use of a modular approach to the plant's design would lead to a lengthy commissioning.
"Just signing a contract, especially when it is at a spectacularly lower price, doesn't lead to easy capital," Sabel said, pushing back at customers who argue their contracts helped get the projects financed.
Poland's state energy company Orlen, which has agreements to acquire a combined 5.5 million metric tons per annum (MTPA) of LNG from the two facilities, said it would "take measures appropriate to the situation," if it does not receive its first Plaquemines cargo as promised in 2026.
China Gas, which agreed to buy 1 MTPA from Plaquemines, is unaware of an extended period facing the Plaquemines startup. It expects to receive its first gas from the project in early 2027 under its contract, a representative said.
Shell "would never entertain a contract that allowed for commissioning to be extended for an undetermined amount of time," said a spokesperson. Chevron CVX.N, France's EDF and New Fortress Energy NFE.O, three other Plaquemines contract holders, declined to comment.
(Reporting by Curtis Williams in Houston; Editing by Sonali Paul)
((Curtis.Williams@thomsonreuters.com; +1 346 324 7560))
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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2023-12-06
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CVX
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Don't let this year's seemingly meager gain for the Dow Jones Industrial Average fool you. Sure, the index is up only less than 10% year to date compared to a 19% jump for the S&P 500. However, the Dow has soared 26% since its previous low set on Sept. 30, 2022.
All that's needed for the Dow Jones to begin a new bull run is for the index to establish a new high. It's less than 2% away from doing so.
A new bull market is nearly here for the Dow Jones. And there are three great Dow stocks for dividend investors to buy hand over fist.
1. Chevron
2023 hasn't been good for Chevron (NYSE: CVX). Shares of the oil and gas giant have tumbled nearly 20%, making it the Dow's second-worst-performing stock of the year.
But this dismal showing has made Chevron's valuation even more attractive. The stock trades at a forward price-to-earnings ratio of only 10. The decline has also boosted Chevron's dividend yield to a lofty 4.2%.
Look for that dividend to grow soon. Chevron has increased its dividend for 36 consecutive years. The company typically announces its dividend hikes in January. I fully expect that Chevron will keep its streak going next month with another dividend increase.
There's a good chance that the stock could rebound in the new year as well. The average Wall Street 12-month price target for Chevron reflects an upside potential of 25%. With oil prices forecast to trade between $70 and $100 a barrel in 2024, the company should be able to generate strong revenue and profits.
2. Microsoft
It's been a completely different story for Microsoft (NASDAQ: MSFT) in 2023. The tech stock has skyrocketed over 50% thanks in large part to the generative AI boom.
Microsoft's dividend yield is only a little over 0.8%. Why should dividend investors consider buying a stock with such a paltry yield? I think there are two reasons.
First, Microsoft's dividend payout continues to grow by leaps and bounds. The company increased its dividend by 10% in September 2023. Over the last 10 years, Microsoft has more than tripled its dividend payout.
Second, Microsoft should have tremendous overall growth prospects. The company is a leader in nearly every important technology of the future, including AI, gaming, quantum computing, and more.
3. Verizon Communications
Verizon Communications (NYSE: VZ) started off 2023 with its share price steadily declining. However, the telecommunications leader has turned things around in a dramatic way in the fourth quarter. Verizon could even end the year in positive territory.
It's easy to pinpoint the reason behind Verizon's comeback. The company reported better-than-expected Q3 results in October. Importantly, Verizon generated year-to-date free cash flow of $14.6 billion, up from $12.4 billion in 2022.
This strong free cash flow should mean that Verizon's dividends will continue flowing and growing. Income investors will no doubt love the company's dividend yield of 6.9%. They'll probably also like the fact that Verizon has increased its dividend for 17 consecutive years.
Granted, Verizon continues to face some challenges. Wireless, in particular, remains a highly competitive business with a lot of customer churn. However, the company plans to launch a bundled streaming deal for its wireless customers that includes the ad-supported versions of Netflix and Max. This move could enable Verizon to hold onto more customers while attracting new ones.
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Keith Speights has positions in Microsoft. The Motley Fool has positions in and recommends Microsoft and Netflix. The Motley Fool recommends Chevron and Verizon Communications. 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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2023-12-06
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CVX
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The energy sector encompasses a lot of different industries, and every investor should probably have a little exposure somewhere along the line. If you are looking at this broad area as December gets underway, you might want to consider Chevron (NYSE: CVX), Duke Energy (NYSE: DUK), and Brookfield Renewable (NYSE: BEP) (NYSE: BEPC).
Here's a quick look at why these three energy stocks are potential buys this month.
1. Chevron is built for safety
Despite the volatile nature of oil and natural gas prices, Chevron has managed to increase its dividend annually for 36 consecutive years. There are two big reasons for this. First, the company is an integrated energy major, which means its business spans from the upstream (drilling) through the midstream (pipelines) and all the way to the downstream (refining and chemicals). Having exposure to all aspects of the energy sector helps to smooth out the inherent ups and downs of the industry because some areas usually benefit while others are suffering.
That's important, but the bigger story is probably Chevron's balance sheet. With a debt-to-equity ratio of roughly 0.12 times, it has the strongest finances of any of its closest peers. Essentially, during the lean times, it can take on debt to keep funding its business and dividend while it waits for better days. When energy prices recover, as they always have historically, the company reduces its leverage to prepare for the next downturn. With a dividend yield of 4.1%, even the most conservative dividend investors should probably feel comfortable owning Chevron.
2. Duke Energy has managed to get even more boring
Duke Energy is one of the largest regulated utilities in the United States. What's interesting here today is that the company recently sold a small contracted renewable power business that it had built up. While driven by long-term contracts, contracted renewable power assets aren't as reliable as regulated assets. Duke's regulated operations have monopolies in the regions they serve and, in return, must get their rates and capital investment plans approved by the government. That limits growth, but it also tends to lead to a highly reliable business with slow and steady returns.
The dividend yield today is around 4.3%, and it has been increased annually for 19 consecutive years. Don't expect rapid dividend growth, but management has a clear line of sight for the future. It currently has a capital spending plan of around $65 billion (including a lot of clean energy investment) over the next five years that should drive earnings growth of between 5% and 7% a year through 2027. What investors will like about this is that the spending is largely regulator-approved and should take place no matter what is happening on Wall Street. So the growth management expects should be fairly reliable.
3. Brookfield Renewable is all in on clean energy
Duke Energy happened to have sold its contract clean energy business to Brookfield Renewable, the last stock on this list. Brookfield Renewable is a pure-play renewable power investment with around 32 gigawatts of power in its globally diversified clean energy portfolio. It is one of the most prominent players in the clean energy space thanks to the fact that it is backed by investment powerhouse Brookfield Asset Management (NYSE: BAM), which often helps to finance the deals it inks. But the really exciting opportunity is the growth built into the portfolio via the company's 130-plus gigawatt backlog of projects it has yet to build. That backlog should support growth for years to come.
There are two ways to invest in Brookfield Renewable that both represent the same entity -- Brookfield Renewable Partners and Brookfield Renewable Corp. As the names suggest, one is a partnership and the other a normal corporation. Brookfield Renewable Corp. was created so that entities unable to invest in partnerships (like pension funds) could invest, broadening Brookfield Renewable's access to capital. The partnership's yield is 5.2%, while the corporation's yield is 4.8%, largely because there is more demand for this structure. Both will provide high yield and clean energy exposure -- the partnership (the entity with the longer history) has increased its distribution annually for more than a decade.
A broad set of energy opportunities
Energy is a bit of a catch-all term, encompassing everything from oil drillers to electricity providers. There are good options for investors throughout the sector in December. Chevron is a rock-solid oil and natural gas stock. Duke is a regulated utility with a solid list of capital investment projects to build. And Brookfield Renewable is an expanding renewable power company with a massive backlog to complete. And all three have attractive yields above 4%.
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Brookfield Asset Management and Brookfield Renewable. The Motley Fool recommends Brookfield Renewable Partners, Chevron, and Duke Energy. 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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2023-12-06
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CVX
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In the business world, a stable balance sheet and ample cash reserves are indispensable, especially in the cyclical Oil/Energy sector. A solid financial foundation not only enhances a company's valuation but also serves as a safeguard during industry downturns.
Excessive debt can erode financial flexibility, making low debt levels crucial in times of plummeting oil prices. Major players may need to borrow during lean years, while smaller entities require cash for survival. Conversely, in periods of soaring oil and gas prices, a robust balance sheet provides a financial stronghold.
The unpredictable nature of the sector underscores the strategic imperative of maintaining a healthy balance sheet. This key factor can determine a company's ability to thrive during periods of plenty and weather the storms of a volatile industry.
Below, we discuss three energy companies with a light debt load, healthy balance sheet, and the willingness to distribute cash to their shareholders. Each of these three companies — Chevron CVX, ExxonMobil XOM and Coterra Energy CTRA — currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chevron: 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 only energy component of the Dow Jones Industrial Average, San Ramon, CA-based Chevron is fully integrated, meaning it participates in every aspect related to energy — from oil production to refining and marketing.
The company boasts a clean balance sheet, manifested by its fairly low debt-to-equity ratio. As of Sep 30, CVX had $5.9 billion in cash and cash equivalents and a total debt of $20.6 billion with a debt-to-total capitalization of a modest 11%, well below the Zacks Oil and Gas Integrated International industry average of 23.5%. This is why the supermajor carries a high investment grade rating of AA from S&P, which translates into low borrowing rates.
Chevron is using its balance sheet strength to pay a safe quarterly dividend of $1.51 per share (or $6.04 per share annualized) and run an outsized stock repurchase program of up to $75 billion.
ExxonMobil: Another bellwether in the energy space, ExxonMobil also has a strong balance sheet. XOM’s optimal integrated capital structure that has historically produced industry-leading returns and an impressive track of capex discipline across the commodity price cycle makes it a relatively lower-risk play in a volatile sector.
ExxonMobil is in excellent financial health. It has an AA credit rating, and used its strong balance sheet to invest throughout the pandemic-driven energy market downturn. With $33 billion, the company is awash in cash. Moreover, XOM finished the third quarter of 2023 with a total debt of $41.3 billion and a debt-to-total capitalization of just 15%.
The company’s fortress-like balance sheet has allowed it to reward shareholders handsomely. ExxonMobil pays a quarterly dividend of 95 cents per share and is on track to buy back up to $17.5 billion during the year.
Coterra Energy: It is an explorer and producer of oil, natural gas and natural gas liquid. Headquartered in Houston, TX, the firm is focused on the Permian Basin, Marcellus Shale and Anadarko Basin.
CTRA has one of the strongest balance sheets as far as shale producers are concerned, which should help it tide over tough times. The company ended the third quarter with cash and cash equivalents of $856 million and total debt of $2.2 billion, with a very manageable debt-to-capitalization of 14.5%, which is also below the Zacks Oil and Gas Exploration and Production US industry average of 26.1%.
Given its healthy balance sheet, CTRA paid out a base dividend of 20 cents per share. This yields above 3% — well above the S&P 500 and one of the highest in the upstream energy space. Coterra also has an active share repurchase program, with $1.6 billion existing under authorization.
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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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2023-12-05
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CVX
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Adds details and background between paragraphs 2-4
Dec 5 (Reuters) - The U.S. Federal Trade Commission has sent shale oil producer Pioneer Natural Resources PXD.N and Exxon Mobil XOM.N a second request for more information on their $60 billion takeover deal, Pioneer said on Tuesday.
The companies are working with the FTC and continue to expect that the deal will be completed in the first half of 2024, Pioneer said in a regulatory filing.
U.S. Senate Majority Leader Charles Schumer and 22 other Democratic senators wrote to the FTC in November saying multi-billion dollar acquisitions by oil and gas giants Exxon and Chevron CVX.N could lead to higher prices for consumers.
Exxon had announced the deal to buy Pioneer in October.
(Reporting by Sourasis Bose in Bengaluru; Editing by Devika Syamnath)
((Sourasis.Bose@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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2023-12-05
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CVX
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
In arguably most circumstances, when you see stocks at 52-week lows, you should avoid them. Based on prevailing market theory, equity valuations culminate from the most recent publicly available information. So, when a security falls to a fresh trailing one-year low, it’s for a reason and usually not a good one.
Nevertheless, contrarian investors are inherently attracted to the red ink because of the (possible) discounted opportunity. If you think about, stocks at 52-week lows have been de-risked in the sense that with a few tweaks, they could return to their 52-week highs. While that would make many longtime stakeholders break even, for the gamblers, we’re talking about 100% returns.
Another factor benefiting the idea of acquiring stocks at 52-week lows is the common adage: buy low, sell high. When you’re buying securities at their low point, you theoretically have a better chance of seeing upside. That compares to buying an already elevated security and hoping it drives even higher.
Still, there’s no guarantee that red ink eventually becomes black. Sometimes, the crimson tone just becomes bloodier. If you can accept this danger, these are the stocks at 52-week lows.
Becton Dickinson (BDX)
Source: JHVEPhoto / Shutterstock.com
On paper, Becton Dickinson (NYSE:BDX) offers a reasonably safe enterprise for investment thanks to its everyday relevance in the medical and scientific fields. A technology firm that manufactures and sells medical devices, instrument systems and reagents, it was on a decent albeit unremarkable run prior to its third-quarter earnings report. Unfortunately, the print wasn’t what Wall Street had hoped for.
Specifically, Becton Dickinson’s quarterly profit landed at $108 million or 37 cents per share. This contrasted sharply with the $265 million or 93 cents per share posted in the year-ago quarter. Moreover, analysts anticipated that the company’s profit would hit $3.43 per share. Obviously, it was a glaring miss and investors penalized BDX heavily.
However, with shares now ranking among stocks at 52-week lows, an argument could be made that BDX is worth picking up. Right now, the market prices BDX at only 17.38X forward earnings, lower than nearly 69% of its peers. Again, this is about banking primarily on the relevance of Becton Dickinson, not just that it fell.
Chevron (CVX)
Source: Sundry Photography / Shutterstock.com
Another relevant idea among stocks at 52-week lows, Chevron (NYSE:CVX) probably is just going through a rough patch. As one of the world’s biggest integrated hydrocarbon energy stalwarts, you can arguably trust Chevron for the long haul. However, recent fundamentals have not boded well for CVX. In particular, CNN Business pointed out that gasoline prices printed more than 60 days of consecutive declines.
Of course, that’s a gift to drivers as the rise in energy costs imposed a severe headwind on consumer sentiment. With more bucks in their wallets, people can spend more on discretionary items, just in time for the holidays. Still, I’m not sure if this narrative can hold up. Yes, demand in China is fading. However, tensions in the Middle East could relatively easily yield supply disruptions.
Also, we’ve got to think about Russia being a major oil player continuing its brazen aggression against Ukraine. Add the possibility of a full return of pre-pandemic social norms and hydrocarbon prices could rebound.
Franco-Nevada (FNV)
Source: Misunseo / Shutterstock.com
Based in Toronto, Ontario, Canada, Franco-Nevada (NYSE:FNV) represents a gold-focused royalty and streaming company. Stated differently, Franco-Nevada enters into agreements with pure-play mining enterprises providing upfront cash in exchange for a share of revenue or actual metal production. In theory, this approach should even out the volatility associated with the mining industry.
That’s because the terms of the contract are known ahead of time, thus affording predictability. However, FNV has been an underperformer recently, likely stemming from a mixed earnings report. In Q3, the company posted earnings per share of 91 cents, beating the 90-cent consensus. But Franco-Nevada rang up sales of only8l $304.53 million, missing the target calling for nearly $318 million.
Obviously, that’s not a good read. However, it should be noted now that FNV’s free cash flow (FCF) yield comes in at 1.96%, much better than sector average. Also, analysts rate FNV a moderate buy with a $152.38 price target, implying about 35% upside. Thus, it’s one of the stocks at 52-week lows worth considering.
Pfizer (PFE)
Source: photobyphm / Shutterstock.com
One of the world’s top pharmaceutical firms, Pfizer (NYSE:PFE) obviously ran hot during the worst of the Covid-19 crisis. As one of the top developers of messenger-RNA vaccines designed to address the SARS-CoV-2 virus, Pfizer with its partner pushed its solution across the finish line before many other competitors. Still, we all knew that this day would come, the day that nobody cared about Covid anymore.
From then on, it was only a matter of inevitability that PFE became one of the stocks at 52-week lows. Now, what’s particularly problematic for risk-averse investors is the nearer-term negative acceleration. I’m not sure if a clear sign exists of a bottom materializing. So, anybody interested in speculating on Pfizer will require a heavy dose of patience.
However, for those thinking well ahead, mRNA medicines might change the therapeutic landscape. Given Pfizer’s acumen in the field, it could eventually storm higher. To sweeten the pot, PFE trades at a subterranean forward earnings multiple of 8.93X.
Sturm Ruger (RGR)
Source: Susan Law Cain / Shutterstock.com
For those that don’t want to listen to a controversial but arguably viable take, you might want to skip this discussion of Sturm Ruger (NYSE:RGR). As a firearms manufacturer, Sturm Ruger will almost certainly attract heated debate no matter what the social circumstance. However, with gun violence representing an escalating crisis in America, RGR seems a justified name among stocks at 52-week lows.
Fair enough, I’m not here to make a political point. On a financial level, Ruger didn’t do itself any favors with its Q3 earnings disclosure. Management reported declining top and bottom line results, reflecting weakness in firearms demand. Unfortunately for the industry, it’s also comparing itself to a likely unprecedented event where people rushed to buy guns during the Covid-19 crisis.
However, with so many firearms, one would need ammunition; otherwise, what’s the point? To that end, Ruger also manufacturers ammo. Still, an even more powerful catalyst could be the addictive nature of firearms. Like a French fry, it’s hard to just have one. So, as economic circumstances normalize, RGR could storm higher.
Marcus (MCS)
Source: Shutterstock
Headquartered in Milwaukee, Wisconsin, Marcus (NYSE:MCS) operates two principal divisions: Marcus Theatres and Marcus Hotels and Resorts. While it’s risky, I can see a case for MCS ranking among the stocks at 52-week lows to speculate on. Still, it will require patience. In the trailing one-month period, MCS incurred a loss of almost 8%.
First, on the hotel and resorts side, most of its properties concentrate in the Midwest. That’s important because it’s possible consumer dollars for “revenge travel” is waning. However, consumers still want to take vacations. It’s just that they might do so at more reasonable locales.
Second, the company’s cineplex business operates under a similar directive: serving smaller Midwestern communities. With millennials moving away from major metropolitan areas to more rural communities for cost-of-living reasons, Marcus could be well-positioned to provide entertainment to a viable consumer demographic.
Also, analysts peg MCS as a unanimous strong buy with a $21 price target, implying over 48% growth.
Alibaba (BABA)
Source: BigTunaOnline / Shutterstock.com
Easily the riskiest idea on this list of stocks at 52-week lows, China’s technology and e-commerce juggernaut Alibaba (NYSE:BABA) was once the toast of Wall Street. In many ways, Alibaba’s rise became synonymous with the stratospheric trajectory of the world’s second-largest economy. However, that narrative now faces serious questions. And that puts BABA stock under dark clouds.
As Foreign Affairs argues, China’s slowdown stems from a decade of overinvestment in property and infrastructure. And this directive received financing from loading debt onto households and local government entities. Now, the chickens are coming home to roost, so to speak. Notably, BABA slipped almost 20% since the beginning of the year.
Still, on the positive side, the Chinese consumer may show resilience like American consumers. What I mean by that is kicking the can down the road through plastic or buy now, pay later (BNPL) platforms. If consumers across the Pacific decide to keep the merry-go-round going, BABA’s forward multiple of 8.27X could be attractive.
Finally, BABA carries a strong buy view among analysts with a $124.74 target, implying almost 69% upside.
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 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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