The advantages of Chevron are quite obvious: strong balance sheet, low debt, around 100% reserve replacement ratio, and a very impressive performance in the last decade, specially in the last 5 years. Chevron has the highest adjusted earnings per barrel-of-oil-equivalent (BOE) in the industry at 17$. On top of that the management has been stable, and Chevron seems to have a strong focus on both selling a "good citizen" corporate image and positioning itself in the renewable energy sector, through its affiliate Chevron Energy Solutions. This focus is good for me as it works as a diversification to Exxon's image and focus on capital and Return on investment (ROI).
Chevron is facing some "difficult" times just like the rest of the oil & gas industry. They face the same challenge of having to employ very high CAPEX year-on-year to ensure sustainable profitability in the long-term. While they have a particularly high CAPEX that could become dangerous if it needed to be sustained, I believe Chevron reached an inflection point in 2013 where CAPEX peaked. According to the management, their CAPEX will now gradually decrease in years to come, and as huge projects that previously consumed very high initial investment come online, Chevron's free-cash-flow (FCF) will increase dramatically, thus sustaining healthy dividend increases.
For any dividend growth investor, this company is one of those companies that I love, high dividend yield, low payout ratio, and long track record of great dividend growth through both prosperity and recessions.
Stock Price: 58.16$
Dividend Yield: 4%
Dividend Raise Streak: 26 Years
Typical Yearly Dividend Growth (5yr): 9%