8 Best Value Dividend Stocks to Invest in According to Warren Buffett

4. Chevron Corporation (NYSE:CVX)

Forward P/E Ratio: 12.71

Chevron Corporation (NYSE:CVX) ranks fourth on our list of the best value stocks to buy according to Warren Buffett. The American multinational energy company manufactures and sells a range of high-quality refined products. The company is in a strong cash position, and its CEO recently outlined plans to boost free cash flow by $6 billion to $8 billion next year, alongside cost reductions amounting to several billion dollars. These improvements are expected to stem from new or expanded oil production projects in Kazakhstan, US shale areas, and the offshore Gulf of Mexico. In the most recent quarter, the company reported an operating cash flow of $9.7 billion, up from $6.3 billion during the same period last year. Moreover, it returned $7.7 billion to shareholders via dividends and share buybacks.

Chevron Corporation (NYSE:CVX) intends to stay profitable even with moderate oil prices, allowing it to fund capital projects and raise dividends. To achieve this, it plans to realize additional structural cost savings of $2 billion to $3 billion by 2026 while maintaining a focus on a low-cost, high-margin production portfolio. The stock has delivered a nearly 5% return to shareholders in the past year.

Chevron Corporation (NYSE:CVX) is one of the top choices of income investors as the company has raised its payouts for 37 years straight, even during tough industry downturns. This makes it a reliable option for investors new to the sector, seeking stable and foundational investments. Unlike many exploration and production (E&P) companies, which come with higher risks, it offers a steadier investment with consistent returns. The company’s quarterly dividend comes in at $1.63 per share and has a dividend yield of 4.17%, as of January 28.

At the end of Q3 2023, 63 hedge funds tracked by Insider Monkey owned stakes in Chevron Corporation (NYSE:CVX), compared with 64 in the previous quarter. These stakes have a consolidated value of over $21 billion.