2. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
Dividend Yield as of February 25: 4.05%
Number of Years of Consecutive Dividend Increases: 35
P/E Ratio: 17.26
Chevron Corporation (NYSE:CVX) is a multinational company supplying oil, gasoline, natural gas, and other petrochemicals. Offering successive dividend increases of 35 years, Chevron Corporation (NYSE:CVX) is a notable value play for income investors. The company outperformed market consensus for revenue in Q4 2021, which came in at $48.13 billion, exceeding estimates by $2.83 billion.
On January 26, Chevron Corporation (NYSE:CVX) announced a per share quarterly dividend of $1.42, a 6% increase from its previous dividend of $1.34. The dividend is payable on March 10, to shareholders of record on February 16. The stock yields 4.05% as of February 25.
Chevron Corporation (NYSE:CVX) was in advanced discussions to acquire Renewable Energy Group, Inc. (NASDAQ:REGI) for roughly $3 billion on February 25, or for $61.50 per share. This move is Chevron Corporation (NYSE:CVX)’s big bet on green diesel.
Cowen analyst Jason Gabelman raised the price target on Chevron Corporation (NYSE:CVX) to $140 from $133 and kept an Outperform rating on the shares on February 23. The analyst expects Chevron Corporation (NYSE:CVX)’s upcoming analyst day to deliver updated guidance and the stock remains his top pick.
53 hedge funds were bullish on Chevron Corporation (NYSE:CVX) in Q4 2021, up from 51 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the largest Chevron Corporation (NYSE:CVX) stakeholder, with 38.2 million shares worth $4.4 billion.
Here is what Goehring & Rozencwajg Associates has to say about Chevron Corporation (NYSE:CVX) in its Q3 2021 investor letter:
“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 publicly 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.”
