Chevron (NYSE: CVX) is a popular choice for income investors looking to capitalize on dividend opportunities in the oil industry. With a track record of consistently increasing its distribution over the past 37 years, Chevron has earned the trust of investors, including Warren Buffett, who holds it as one of the largest positions in the Berkshire Hathaway portfolio.
In the first two quarters of 2024, Chevron paid out $1.63 per share to shareholders. If this amount remains the same for the rest of the year, it would total $6.52 per share and represent a 4.8% compound annual growth rate in dividend payouts.
In 2023, Chevron reported a net income of approximately $21.4 billion, with dividend payments totaling around $11.3 billion. This resulted in a payout ratio of 53.2%. Looking back over the past three years, Chevron’s average payout ratio was 49.8% from 2021 to 2023.
Chevron’s commitment to rewarding shareholders is evident in its plans to continue increasing dividends in the future. The company expects to boost production by more than 3% annually through 2027, driven by growth in assets located in the Permian Basin and the Gulf of Mexico.
With shares trading at 7.7 times operating cash flow, Chevron presents an attractive opportunity for income investors. Despite not being included in the Motley Fool Stock Advisor’s list of the 10 best stocks to buy now, Chevron’s strong dividend history and growth prospects make it a compelling option for those looking to add oil supermajors to their portfolios.