Chevron (CVX) announced Wednesday after trading hours that the company has approved a stock buyback program along with a dividend hike. After an incredible year for the energy sector as a whole – and Chevron as a company – they are investing in themselves and giving back to shareholders.
The energy giant has been repurchasing shares since 2019 under a $25 billion buyback plan. In the last quarter alone, they repurchased $3.75 billion in shares. But they’re taking things up a notch for the new plan set to begin on April 1, as the buyback plan was approved at $75 billion with no expiration date.
Some politicians have taken issue with the success that companies like Chevron are seeing, calling them war profiteers. There’s no question this company and many others have benefited from the massive increase in oil and gas prices as a result of the trouble in Ukraine. The third quarter of 2022 saw Chevron report more than $12 billion of free cash flow with $11 billion net income.
In terms of the dividend hike, shareholders will enjoy a modest bump in payout ratio – from $1.42 to $1.51. The next dividend is set to be paid out on March 10.
Taking this into account along with the fact that Chevron is continuing to invest in themselves through a buyback program, is now the time to buy CVX stock? The company is up nearly 40% in the last year, as the stock market as a whole has suffered. This news alone has sent shares trading 4% higher Thursday morning.
To help you make your next move with confidence, we’ve unveiled three key insights you need to see in regard to CVX through the VectorVest stock analysis software.
CVX is Fairly Safe with Excellent Upside Potential and the Timing is Right for Investors
The VectorVest system is the most simple, straightforward approach to uncovering and analyzing opportunities in the stock market. It tells you exactly what to buy and exactly when to buy & sell it - it doesn’t get any easier than that! The system has outperformed the S&P 500 for decades now, and it can help you do the same.
It’s all based on a proprietary stock-rating system. Relative value (RV), relative safety (RS), and relative timing (RT) tell you everything you need to know. The ratings sit on a simple scale of 0.00-2.00 with 1.00 being the average. And, based on these three ratings, VectorVest is able to give you a clear buy, sell, or hold recommendation at any given time, for any given stock - including CVX. Here’s the current situation:
- Excellent Upside Potential: The RV rating assesses a company’s long-term price appreciation potential (3 years out) compared to AAA corporate bond rates and risk. Right now, CVX has an excellent RV rating of 1.57. And, the stock is currently undervalued - its current value is as high as $255.28.
- Fair Safety: In terms of risk, CVX is fairly safe - with an RS rating of 1.02. This is calculated based on the financial consistency and predictability of the company, along with its debt-to-equity ratio and business longevity.
- Good Timing: Finally, CVS has good timing with an RT rating of 1.11. This is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s calculated day over day, week over week, quarter over quarter, and year over year.
The overall VST rating for CVX is 1.23 - which is good. Is it enough to earn a buy recommendation, though? To find out, get a free stock analysis here! You don’t want to miss out on this opportunity.
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VectorVest advocates buying safe, undervalued stocks, rising in price. Right now, CVX is undervalued with excellent upside potential. It also has fair safety - and the timing is good for this stock right now.
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