Recent Sell – Chevron Corp

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Another week and another sale. I cant remember when I had back-to-back sales in my portfolio. Like I’ve mentioned in the past, I normally do not like to sell and prefer holding shares forever. But sometimes you just have to face the reality and pull the trigger on some companies.

Yesterday, I decided to sell and close our position in Chevron Corp (CVX). Chevron is still one of the largest oil & gas companies in the world and own immense assets across the world. But as oil prices have collapsed and have stayed depressed for almost two years now, the low prices have resulted in the company taking some eyebrow-raising moves. First, Chevron resorted to cutting its buyback program (I’ve always remained critical of stock buybacks. Companies, no different than retail traders driven by emotion, buy when stock is expensive and terminate such programs when the stock is cheap) and more recently has resorted all sorts of financial engineering to prop up its books.

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Is Chevron Dividend Safe?

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Chevron Corp (CVX) is one of the largest oil & gas companies in the world. The company has a market cap of $160B and is an energy behemoth that operates in upstream and downstream businesses.

Last week, the company reported quarterly earnings of -$0.31 on a revenue of $29.25B, which is down 36.6% YoY. Its the first quarter that Chevron had such a huge loss in the past 13 years. While investors were expecting a bad quarter (and a bad year) from Chevron, it was still better than expected as the revenue beat the expectations. The company also announced a quarterly dividend of $1.07, which is what it has paid since Q2 2014.

The media lit up with news from Oppenheimer analyst Fadel Gheitpredicting a dividend cut from Chevron in the coming quarters as he predicts that the company is on an unsustainable path of borrowing funds to pay the dividends.

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What’s the Fair Price for Chevron

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Chevron Corp (CVX) is an energy giant that barely needs an introduction. A global energy powerhouse, Chevron was founded as Standard Oil of California in 1879 and became Chevron Corporation in 1984. Chevron is a component of the Dow Jones Industrial Average and since 2008; but was also part of the index from 1930 to 1999. The current downturn in the oil and energy prices have put a downward pressure on the stock prices, but Chevron has stood through such storms, wars, and recessions in the past. A dividend champion that has a record of raising dividends for 27 years, a 4.2% entry yield is lucrative – this article looks at the fair price of Chevron Corp.

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