In this article, we discuss 5 dividend stocks that analysts are recommending. If you want our detailed analysis of these stocks, go directly to Analysts Are Recommending These 10 Dividend Stocks.
5. Chevron Corporation (NYSE:CVX)
Dividend Yield as of January 14: 4.16%
Number of Hedge Fund Holders: 51
Chevron Corporation (NYSE:CVX) is an American multinational energy company, distributing gasoline, natural gas, and petrochemicals worldwide. Chevron Corporation (NYSE:CVX) is a popular stock among the smart money. The Q3 database of Insider Monkey suggested that 51 hedge funds held stakes in Chevron Corporation (NYSE:CVX), worth $4.4 billion.
On January 14, Truist analyst Neal Dingmann raised the price target on Chevron Corporation (NYSE:CVX) to $167 from $150 and kept a Buy rating on the shares as part of a broader research note on the exploration and production group. The analyst stated that companies dealing primarily in oil have been assigned higher price targets as he increases his 2022 oil price estimates by roughly 10% and his 2023 deck by about 8%.
Chevron Corporation (NYSE:CVX) declared on October 18 a quarterly dividend of $1.34 per share, which was paid on December 10 to shareholders of record on November 18. The company offers a solid dividend payout ratio of 62.40%, and has been successively increasing its dividend yield for 34 years.
Consistent with its track record of returning excess cash to shareholders, Chevron Corporation (NYSE:CVX) on December 1 announced that it is raising its share buyback guidance range to $3 billion-$5 billion per year, as compared to the prior guidance of $2 billion-$3 billion per year.
Ric Dillon’s Diamond Hill Capital is the biggest Chevron Corporation (NYSE:CVX) stakeholder, with the hedge fund holding 5.1 million shares of the company, worth $523.8 million.
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.”
