2. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 51
Dividend Yield as of February 16: 4.20%
Arosa Capital’s Stake Value: $11,002,000
Chevron Corporation (NYSE:CVX), an American multinational energy company, experienced a slight growth in the number of hedge funds having stakes in it in Q3. 51 hedge funds tracked by Insider Monkey were bullish on the company in the third quarter, up from 50 in the previous quarter. The total value of these stakes is over $4.44 billion.
Chevron Corporation (NYSE:CVX) gained ground among analysts as the company managed to increase its dividend during the last year’s oil crash, unlike its counterparts, who slashed their dividends during this time. On January 26, Chevron Corporation (NYSE:CVX) announced a 6% increase in its quarterly dividend at $1.42 per share, with a yield of 4.20%. Moreover, the company maintains a 35-year track record of consistent dividend growth. In February, Barclays raised its price target on Chevron Corporation (NYSE:CVX) to $148, with an Overweight rating on the shares.
In Q4 2021, Chevron Corporation (NYSE:CVX) was the sixth-largest holding of Arosa Capital. The hedge fund held 93,750 million shares in the company, valued at over $11 million. Chevron Corporation (NYSE:CVX) accounted for 2.71% of the fund’s portfolio.
Goehring & Rozencwajg Associates mentioned Chevron Corporation (NYSE:CVX) in its Q3 2021 investor letter. Here is what the firm has to say:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects. According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
