We recently published a list of 12 Best Fortune 500 Dividend Stocks To Buy Right Now. In this article, we are going to take a look at where Chevron Corporation (NYSE:CVX) stands against other best Fortune 500 dividend stocks to buy right now.
Compiled and published by Fortune Magazine, the Fortune 500 is an annual list that ranks the biggest US companies by revenue. In total, the Fortune 500 companies represent two-thirds of the US GDP with $18.8 trillion in revenues, $1.7 trillion in profits, and $43 trillion in market value (as of March 28, 2024), and they employ a workforce of 31 million around the globe.
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2024 proved to be a big year for large-cap stocks, as the broader US market achieved gains of nearly 25%, piggybacking on a 26% performance the year before. Large-cap stock funds, with the heaviest tilt toward growth stocks, performed the best last year, even as the market’s rally somewhat broadened from the handful of mega tech companies that have led much of the bull market.
However, the tailwinds that propelled the market to new heights are beginning to recede, as the rate of monetary policy easing slows down, long-term interests swing upward, inflation becomes sticky, and the US economy is slowing down. Moreover, the upcoming presidency of Donald Trump and his much-rumored tariffs could also herald a more volatile period for markets, as they could further fan inflation fears and put pressure on stock prices.
That said, the expected upcoming fluctuation isn’t going to be something that the mega corporations haven’t dealt with before. A 2023 report by J. P. Morgan revealed that despite the considerable volatility during the period, large-cap stocks gained around 162% between 2013 and 2023, galvanized primarily by big tech. Another 2023 report by CNBC unveiled that large US companies outperformed other investments between 2003 and 2023, with average returns of 9.3%. However, it hasn’t always been a smooth ride, as despite the stability and reliability large-cap stocks are known for, investors had to survive drops of 56.8% during the 2007-2009 bear market, 33.9% in 2020, and 25.4% in 2022.
In addition to the few tech giants regularly making headlines with their gains, large-cap dividend stocks could also be an attractive option for investors looking for a reliable, significant, and growing stream of income. According to Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, the broader US large caps are expected to post an 8% increase in dividend payments in 2025, compared to the 6.4% uptick in 2024, 5.1% gains in 2023, and the 10.8% increase witnessed in 2022.
Large-cap companies tend to have more robust balance sheets compared to their smaller counterparts, enabling them to navigate through market fluctuations more smoothly while also returning value to their shareholders. Corporations in the US have continuously grown their considerable cash stockpiles since the beginning of the pandemic, thanks to the economic resilience we have witnessed recently. A report from treasury advisory firm Carfang Group revealed that as of Q1 2024, US corporations increased their cash holdings to an all-time high of $4.11 trillion, up 12.6% from the same period in 2024 and $1.28 trillion more from their pre-pandemic levels.
Methodology
To collect data for this article, we referred to the top 50 companies among the Fortune Global Rankings. Then, we picked out 12 US-listed companies with the highest dividend yields as of January 13, 2025, and ranked them by their number of hedge fund investors according to the Insider Monkey database as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An aerial view of an oil rig at sea, the sun glinting off its structure.
Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 63
Dividend Yield: 4.26%
Market Cap: $281.5 billion
Chevron Corporation (NYSE:CVX) manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives. The company owns five US fuel refineries and also boasts a network of Chevron and Texaco service stations.
In Q3 of 2024, Chevron Corporation (NYSE:CVX) reported revenue of $50.67 billion, surpassing analysts’ expectations by $1.63 billion, despite the outages and maintenance at several locations. The company also generated $9.7 billion in operating cash flow, up from $6.3 billion in the prior quarter. Additionally, it returned $7.7 billion to shareholders through dividends and share buybacks during the quarter. Chevron Corporation’s (NYSE:CVX) dividend growth streak spans over 37 years, placing it on our list of the Dogs of the Dow Dividend Stocks to Invest In.
Chevron Corporation (NYSE:CVX)’s Q3 2024 worldwide production increased by 7% from the prior year and set a third-quarter record. The company continues to see strong performance in the Permian, executing major turnarounds at TCO and Gorgon ahead of schedule. These projects, combined with additional project startups through 2025, are expected to grow the oil giant’s Gulf of Mexico production to 300,000 barrels per day by 2026.
Chevron Corporation (NYSE:CVX) also remains focused on strengthening its balance sheet further by divesting its non-core positions at significant value. The company has announced asset sales in Canada, Alaska, and Congo, which will contribute before-tax proceeds of approximately $8 billion pending regulatory approvals. The company is also saving cash by optimizing and improving its capital efficiency. Chevron has reduced its capital expenditure budget from around $40 billion a decade ago to around $15 billion in 2025, reflecting its commitment to spending rationalization. The company’s focus on boosting its free cash flow could result in higher returns for its shareholders, making it an attractive option for investors looking for stable income in the energy industry.
63 hedge funds tracked by IM held a stake in Chevron Corporation (NYSE:CVX) at the end of Q3 2024, with Warren Buffett’s Berkshire Hathaway holding the largest stake worth nearly $17.5 billion.
Overall, CVX ranks 7th on our list of best Fortune 500 dividend stocks to buy right now. While we acknowledge the potential for CVX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CVX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.