Chevron Stock Declines Despite Another Dividend Hike

Chevron (CVX) stock is down Friday after the integrated energy company beat revenue forecasts but came up short of profit expectations for its fourth quarter.

In the three months ending December 31, Chevron's revenue increased 10.7% year over year to $52.2 billion. Earnings per share (EPS) declined 17.9% from the year-ago period to $2.06.

"In 2024, we delivered record production, returned record cash to shareholders, and started up key growth projects," said Chevron CEO Mike Wirth in a statement. "We strengthened our portfolio and committed to reduce costs and maintain capital discipline, positioning us for significant free cash flow growth."

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Chevron, which is seeking re-approval by the White House of a license that supports 200,000 barrels per day of production in Venezuela, is among the first U.S. companies to follow a Trump administration executive order renaming the Gulf of Mexico the "Gulf of America."

Chevron said worldwide net oil-equivalent production was up 7%, with U.S. output up 19%. "The company started up several key projects in the Gulf of America," Wirth said, "including the industry-first, high-pressure Anchor project."

The results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $46.8 billion and earnings of $2.11 per share, according to CNBC.

Chevron also announced a 4.9% increase to its quarterly dividend. Its new quarterly dividend rate is $1.71 per share, and the first payment will come on March 10 to shareholders of record as of February 14.

Chevron is one of the best dividend stocks to buy for dependable dividend growth and this latest increase marks the 38th consecutive year the integrated energy company has raised its annual dividend payment.

Is Chevron stock a buy, sell or hold?

Wall Street is bullish on the energy stock, which has underperformed the S&P 500 over the trailing 12 months with a total return of about 9% vs 25% for the index. That performance gap has narrowed over the last three months, though, with CVX up 7% since October 31 and the index up 5%.

According to S&P Global Market Intelligence, the average analyst target price for the Dow Jones stock is $177.19, representing implied upside of more than 16% to current levels. Additionally, the consensus recommendation is a Buy.

Financial services firm BofA Securities is one of those outfits with a Buy rating on CVX, which remains one of the best long-term investment stocks to buy.

"We rate CVX Buy and it is our top pick into 2025 despite the oil macro on rising free cash flow from projects and cost cutting, and getting Hess certainty," wrote BofA Securities analyst Jean Ann Salisbury in a January 10 note.

Salisbury added that BofA expects Chevron's deal for Hess to close, ​"giving CVX 30% stake in Guyana filling its end of the decade production gap."

The analyst has 12-month price target of $180 on CVX, implying upside of approximately 20% to current levels.

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