Should I Buy Chevron (CVX)? Finance YouTuber Analysis

Berkshire Hathaway, under Greg Abel, sold approximately $8 billion worth of Chevron shares when the stock was at historic highs, following a 36% surge due to rising oil prices. This move is highlighted as a smart decision to 'cash in at the peak,' demonstrating Abel's active management and willingness to sell into strength.

“Forse la mossa più intelligente di tutte ha venduto circa 8 miliardi del titolo Chevron, mentre il titolo del colosso petrolifero toccava i massimi storici.”

The YouTuber suggests Chevron as a strong buy, highlighting its capacity to generate substantial and consistent cash flow, particularly when energy prices are robust. This financial strength enables the company to fund dividends, share buybacks, and investments without dependence on inexpensive financing, making it well-suited for periods of high borrowing costs.

“Here, for example, companies like Exxon Mobile or Chevron generate massive cash flow, especially when those energy prices are strong. They can pay dividends, buy back their shares, and invest in their business all without needing that cheap financing.”

The YouTuber recommends Chevron as a defensive play during market uncertainty, noting its 11% return over the last month. As an integrated oil stock, it covers the entire industry from exploration to refining, offering both upside potential and a 3.3% annual dividend.

“I highlighted Chevron ticker CVX in our video last Tuesday, already up 7% since then and 13% over the last month. Chevron gives you an integrated oil stock with everything from oil exploration through refining and gas.”

The YouTuber believes Chevron is undervalued given the sustained high oil prices. He argues that analyst revenue and earnings estimates for the company are too low, not fully reflecting the increased profitability from current market conditions, suggesting significant upside surprise potential.

“I believe that's going to continue higher as they continue to make money. And one of the clues that all this these high oil prices have not been fully baked into these oil stocks yet.”

Despite recent upside due to its presence in Venezuela, the long-term prospects for oil companies like Chevron benefiting from Venezuelan oil are dim. Significant investment is needed to upgrade outdated fields, and political uncertainty makes it a risky proposition, especially with current low oil prices.

“I would say despite some of the upside we saw in some of those oil companies, Chevron was a big winner over the last few days just because it is the only major US oil company that has continued to work in Venezuela. We saw also saw some upside from some of the other explorers though. Exxon, some of the other uh oil explorers there as well. I would say avoid those names because they're really not going to get anything out of this.”

The analyst suggests looking at Chevron for those worried about further market losses, as the energy sector has held up and produced positive returns. This is presented as a safe haven stock.

“So, if you're worried about those further losses, look to names like Expand Energy, ticker EXE, Chevron, CVX, Merc, MRK, and Medronic, ticker MDT.”

The YouTuber suggests buying Chevron, along with other energy stocks, as an attractive value play. He notes the sector's underperformance this year and anticipates 16% earnings growth next year due to cost-cutting and improved efficiency. He also points out that WTI crude prices around the low $60s act as a floor, supporting the sector.

“And that coming earnings improvement should drive returns from here, especially in favorites like EOG Resources, ticker EOG, Diamondback Energy, ticker F&G, and Chevron, ticker CVX.”

The analyst is watching Chevron as part of a broader shift into energy and healthcare sectors, which are seen as offering attractive value and portfolio protection during potential market downturns. This aligns with a barbell portfolio strategy.

“Besides the broad ETFs with these sectors like the Energy Spider, the XLE, and the Healthcare ETF, ticker XLV, I'm also watching stocks like EOG Resources, ticker EOG, Chevron, CVX, United Health Group, UNH, and Novartis, NVS.”

The YouTuber expresses a preference for Chevron Energy as a stock to consider within the energy sector, which he views as a protective investment during market corrections. He argues that energy stocks, including Chevron, are undervalued and offer strong cash flow, making them suitable for safeguarding investments.

“Devon and Chevan Chevron are two that I really like there.”

The YouTuber suggests Chevron as a buy within the energy sector, which he identifies as trading at a discount to its long-term valuation and having an 18% upside to analyst price targets. He also notes that Buffett added shares of Chevron during the quarter.

“In energy stocks, I like Devon Energy, Baker Hughes, Chevron, and Kinder Morgan.”

Despite short-term weakness in oil stocks due to a global oil surplus and slowing demand, energy companies like Chevron remain cash flow positive. Long-term investors can pick up good names at discounted prices for solid long-term returns and dividends.

“So long-term investors can pick up good names like Chevron, ticker CVX, and Diamondback Energy FG at discounted prices for those solid long-term returns and dividends.”

The YouTuber suggests watching Chevron due to the new budget bill, which provides easier access for oil and gas stocks to drill on federal land and offers lower royalty rates and better deductibility of costs, indicating a tailwind for the sector.

“So, be watching names like Chevron, CVX, and especially drilling services like Schlumbumber, ticker SLB, and Baker Hughes, ticker BKR.”

The YouTuber recommends Chevron due to its low-cost production and its attractive 4.7% dividend yield. He expects the energy sector to continue performing well in the short term, making it a good defensive play.

“Though I also like Chevron, CVX on its lowcost production.”

The analyst suggests long-term investors should start picking up shares of energy stocks, including Chevron, over the rest of the year. He notes the sector is the cheapest in the market, trading below its 10-year average valuation, and profits are forecast to rebound 21% next year.

“Long-term investors will be rewarded by beginning to pick up shares over the rest of the year.”

The analyst recommends Chevron due to its dependable dividend and efficiency, which helps it in downturns. The company has a high return on capital expenditures and prioritizes shareholder returns, increasing its dividend for over 38 consecutive years. Its global scale and assets protect cash flow, and shares are expected to return to previous highs.

“While a full-on recession would see the price of oil drop closer to $50 a barrel and hurt all the stocks in this sector, we already see that energy stocks are trading very cheaply, and Chevron benefits in the downturns by being one of the most efficient in the industry.”

The YouTuber identifies Chevron as a top safety pick in the energy sector, citing its 5% dividend yield and unmatched scale. The company prioritizes shareholder returns, evidenced by 38 consecutive years of dividend growth and a higher allocation of free cash flow to dividends and buybacks compared to peers, leading to outperformance despite recent oil price drops.

“Back to our list, and this is the only stock down for the year, Chevron Corporation, Ticker CBS, but I had to include my favorite safety name in Energy with its 5% dividend yield.”

The analyst recommends Chevron for its strong dividend growth potential, despite recent earnings decline, due to its 37 consecutive years of dividend increases, low payout ratio of 62%, and significant scale in the energy industry. He believes value will be unlocked as the oil market recovers, allowing investors to collect dividends while waiting.

“first up is one of my favorite energy stocks Chevron ticker CVX with its 4.3% dividend now that's not the highest yield in the no or in our best of list but Chevron has the other fundamentals I'm looking for that means stronger dividend growth in the future”

The analyst states that Chevron has been a long-time favorite oil stock, believing there is significant value currently. He notes that while shares haven't moved much recently, investors receive a 4.3% dividend yield while waiting for appreciation.

“one of my favorites here Chevron ticker CVX has long been a favorite Oil stock of mine shares haven't done much over the last couple of years but I believe there's a lot of value here and you're getting a 4.3% dividend while you wait”

The YouTuber favors Chevron for its balanced dividend (4% yield) and buyback program, along with its low operational cost profile. This efficiency ensures strong cash flow even if oil prices drop, leading to consistent dividend growth (37% over 5 years) and an increased buyback guidance of up to $20 billion annually.

“I like Chevron for its balanced dividend and buyback plus its lower cost of production versus this bear you can see in the lower left graph here Chevron has one of the lowest operational cost profiles in the industry meaning even if the price of oil does fall the company remains a cash flow champion and that efficiency has meant more cash return to shareholders and a higher dividend growth.”

The analyst recommends Chevron for its strong cash flows and dividend potential. It's viewed as a reliable dividend stock with growing earnings, suitable for income rather than aggressive growth.

“I do like energy stocks such as Devon energy ticker DVN as well as Diamondback energy Fang and Chevron for their cash flows though these aren't the kind of stocks that are going to make you rich these are good dividend names with Rising earnings and Rising cash flows”

The analyst recommends repositioning into strong dividend names like Chevron within the energy sector. Despite current low earnings growth, the sector is cheap at under 11 times expected earnings, a 30% discount to its 10-year average, suggesting upside potential outweighs downside risks.

“investors can start repositioning in strong dividend names like Devon energy that's ticker dvn Chevron CVX and Diamondback energy ticker FNG enjoying those cash flows until the prices rebound”

The YouTuber recommends Chevron, highlighting its strong cash flow despite recent drops in oil prices. With a production cost around $40-45 per barrel, Chevron remains highly cash flow positive even at $82 a barrel, allowing it to continue paying its 3.7% dividend yield and grow earnings.

“energy stocks like Chevron Corporation tier CVX dropped last week on that plung in oil prices but have held up really well over the past couple of months and should continue to cash flow.”

The YouTuber recommends Chevron for its combination of return and safety, citing its low production costs, strong management, and diversified energy mix. The company has a high dividend growth rate among energy companies and a significant share buyback program. Chevron is also investing in renewables and carbon capture, which could protect its dividend long-term. The stock is trading at an attractive 12 times P/E ratio.

“Chevron is also prioritizing cash return and usually increases the dividend for the November payment it's also recently raised the buyback program to as high as 20 billion dollars taking as much as six percent of the shares off the market Shares are trading for an attractive 12 times p e ratio and a solid dividend yield.”

The YouTuber highlights Chevron as a dependable dividend stock with a 3.7% yield and strong annualized returns. Its low cost of production, diversified energy sources, and investments in renewables like hydrogen and carbon capture provide stability. The company's attractive valuation at 12 times P/E and ongoing share buyback program further support the recommendation.

“low cost of production and great management across just a huge mix of energy sources gives Chevron the diversification to survive any environment that means the shares don't fall apart when oil prices fall”

The YouTuber suggests buying Chevron shares if oil prices fall to around $70-$75 per barrel. He notes that while the upside for energy stocks isn't as strong as after the pandemic, Chevron remains a cash flow machine with a production cost of $40-$45 per barrel. This would allow investors to pick up shares at a discount with a higher dividend yield and more price appreciation potential.

“now the only thing I would say about this if you want to pick up shares maybe wait for oil to fall back down to around 70 or 75 dollars a barrel that would be at the lower end of the recent price range I think you can pick up shares of these energy names at a discount at that point with that higher dividend yield and allowed for more price appreciation in the future”

The YouTuber suggests buying Chevron (CVX) and other oil stocks. Despite an 8% year-to-date decline and flat performance since May, oil prices have recently jumped to near $77 a barrel. Higher oil prices should translate into improved cash flows and dividends for oil companies, potentially leading to a quick rise in share prices.

“Another sector I'm watching oil here and Chevron Court ticker CVX going to be reporting its earnings on Friday along with Exxon Mobil with the shares down eight percent this year and really flat since May most energy stocks have lagged the market despite the price of oil jumping back to the top of its range recently near 77 a barrel a higher oil should start showing through an oil company cash flows as well as dividends and could raise these shares pretty quickly”

The analyst recommends buying Chevron as part of a broader energy sector play. He argues that energy stocks are significantly undervalued, trading at a 32% discount to their 10-year average P/E ratio, and are priced for a steep recession that may not materialize. If the economy avoids a recession, oil prices could quickly rise to $100+, benefiting these companies. If a recession hits, energy stocks are already priced for it and offer downside protection compared to other sectors.

“We see uh some safer names like Chevron Corporation ticker CVX one of my favorite oil stocks here down 11 and a half percent just so far this year.”

The YouTuber is using the recent sell-off in energy stocks to re-enter 'favorite names' like Chevron. They believe that despite recession fears, energy prices will find strong support between $68-$72 a barrel due to OPEC actions and the U.S. Strategic Petroleum Reserve refilling, making the current dip an opportunity.

“I'm using the sell-off here to get back into some of those favorite names like... Chevron took our CVX some of the strongest energy names in this sector I think they get a lot of support here and you need to be watching these especially this week.”

The analyst suggests avoiding Chevron in the short term, despite current high free cash flow for energy companies. He anticipates that the first two quarters of 2023 will show weak year-over-year comparisons due to the oil price spike in early 2022. Management may signal a more conservative approach to dividends and cash use, which could unnerve investors.

“It's going to be two very rough quarters for comparables coming okay if you remember back last year here in the first and second quarter that spike in oil spiked in February of last year on the Ukraine Invasion and then Rose steadily to 120 a barrel by June.”

The YouTuber recommends Chevron for long-term investment, citing its low breakeven oil price of $50/barrel, which ensures profitability even if oil prices decline. He highlights the company's increased share repurchase program and a solid 3.3% dividend yield, supporting the stock despite its current valuation being slightly above its five-year average.

“You can see Chevron is among the lowest in the group, needing oil at just $50 a barrel to turn a profit.”

The YouTuber recommends Chevron due to its low cost of production, which makes it profitable even with oil prices as low as $50-$60 a barrel. He also highlights its 3.3% dividend yield and its consistent free cash flow, which is being returned to shareholders through dividends and buybacks.

“Even after the run in shares I still like Chevron ticker CVX on its low cost of production and 3.3 dividend yield.”

The YouTuber holds Chevron, acknowledging its significant run-up due to higher oil prices, which has stretched its valuation to 2.1 times sales, 33% above its five-year average. While he doesn't expect much price return, he plans to hold for the growing dividends and has sold call options against his position.

“I don't think there's much price return left but those dividends are just gonna keep on growing so I've sold some call options against it and am holding those shares.”

The YouTuber suggests buying Chevron for long-term inflation hedging and potential revaluation due to a weakening dollar and rising inflation. They note its strong dividend, low debt, and good management, despite current high valuation multiples. The company is also held by Warren Buffett, which adds to its appeal.

“Yo la energía la veo como algo estratégico. Warren Buffet tiene el 10% de su cartera en energía y es en mejor inversor de todos los tiempos, así que algo sabe él, ¿no? Entonces, no me parece para nada disparatado tener algo de la cartera en Chevron, por ejemplo.”

The YouTuber indicates Chevron could be undervalued, with a fair value above $250 per share compared to its current price of $150, according to discounted cash flow analysis. While price-to-earnings suggests some undervaluation, Enterprise Value to EBITDA indicates it's closer to fairly valued or slightly overvalued, suggesting a potential pullback could offer a better entry point.

“we can see the current price is about 150 bucks per share the fair value using discount of free cash flow is up above 250 per share so this one looks like it could be undervalued using discount of free cash flow”

The analyst recommends Chevron, an oil and gas major, as a cheap stock. The company has benefited from higher oil prices and prudent investments, generating significant cash flow and paying down debt. Despite the long-term shift away from oil, Chevron and its peers are managing capital spending carefully and returning value to shareholders, making it a high cash flow business for the next decade.

“I expect this to be a high cash flow business over the next decade as management both at Chevron and its competitors start to be more in how much money they're investing in growth and how much they're trying to return to shareholders”

Warren Buffett's Berkshire Hathaway invested $26 billion in Chevron, indicating a belief in the oil and gas sector. Buffett has historically used oil stocks to profit from price increases or to hedge his portfolio, often entering before a peak.