There is no denying that the stocks are running at high valuations. Over the past 2-months finally some stocks are adjusting down towards acceptable purchase levels. Lucky for me many of the stocks I own or want to own have struggled recently which has created buying opportunities. Oil stocks have been down all year, but some of the big players have still been to expensive for my taste. Yesterday I picked up shares of one of my favorite stocks at a price I am comfortable with.
I purchased 30 shares of Chevron Corp (NYSE: CVX) for $97.91 a share totaling $2,946.34. My CVX share total is now 64.45 shares. This stock purchase will add $128 dollars to my annual dividend income. This latest purchase in my Investment Hunting portfolio.
An Overview of CVX
Chevron Corporation, CVX manages its investments in subsidiaries and affiliates. The Company operates through two segments: Upstream and Downstream. Upstream operations consist primarily of exploring for, developing and producing crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas (LNG); transporting crude oil through international oil export pipelines; transporting, storing and marketing natural gas, and operating a gas-to-liquids plant. The Company’s Downstream operations primarily consist of refining crude oil into petroleum products; marketing crude oil and refined products; transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car, and manufacturing and marketing commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. Source: http://www.schwab.com.
Learn more about the CVX business at the company About page.
CVX Dividends And Annual Growth Rate
- 3-Year Compound Annual Growth Rate of 10.9%
- 5-Year Compound Annual Growth Rate of 9.6%
- Annual Dividend Yield of 4.31%
- 5-Year Dividend Per Share Average of $3.51
- 5-Year Dividend Yield Average of 3.17%
- Payout Ratio (TTM) of 46.70%
- Dividend Coverage Ratio (TTM) or 214.11%
The chart below shows the past eight years of annual dividends for the CVX. This chart illustrates the CVX commitment to its investors through continued dividend payouts and increases. Since crude oil prices are down it is possible that CVX will not raise dividends this year. However, I believe CVX will continue paying dividends even if assets need to be sold or projects delayed to do so.
Is CVX Stock Fairly Priced
CVX is trading at a P/E Ratio of 10.86. Capital IQ ranks CVX as 4-stars with a 12-month target price of $125. Morningstar ranks CVX as 4-stars with a fair-value price of $115. CVX stock is down 32% over the past 12-months and 13% year to date. I believe CVX stock to be undervalued and a great buy. My purchase at $97.91 is $.010 above the 12-month low for CVX. I believe this stock is undervalued.
Conclusion
I believe CVX is a good buy and hold stock, however it has been overpriced the past few years. I like my entry point in the $97 dollar range and plan on adding shares at this price or on another dip. This stock is likely to be volatile for the next 12-24 months, but I have faith in my long term success with this stock.
What is your opinion of CVX? Do you think oil stocks are too risky? Which stocks are you buying these days?
Full Disclosure: Long CVX