3 Reasons to Buy Chevron Stock Like There's No Tomorrow

Core Viewpoint - Chevron is positioned for significant free cash flow growth due to strategic investments and recent acquisitions, making it an attractive investment opportunity Group 1: Free Cash Flow Growth - Chevron's investments in key regions, including Kazakhstan and the Gulf of Mexico, are expected to drive a $10 billion improvement in free cash flow next year [2] - The acquisition of Hess is projected to add $2.5 billion to free cash flow next year, with anticipated annual cost savings of $1 billion [3] - Rising cash flow will enable Chevron to return more capital to investors through share repurchases and dividends [4] Group 2: Dividend Growth - Chevron has a strong dividend track record, having increased its payout for 38 consecutive years, the second-longest streak among oil companies [5] - With a net debt ratio below 15%, Chevron has significant financial flexibility to support continued dividend increases [6] - The current dividend yield is approximately 4.5%, significantly higher than the S&P 500 average, making it appealing for income-seeking investors [6] Group 3: Lower-Carbon Energy Initiatives - Chevron is investing $1.5 billion, about 10% of its 2025 capital budget, to reduce carbon intensity and expand its new energy business [8] - The company has entered the U.S. lithium supply sector by acquiring 125,000 net acres in the Smackover Formation, aiming to establish a commercial-scale lithium business [9] - Chevron plans to develop profitable lower-carbon energy platforms, positioning itself for growth as the world transitions to cleaner energy [10] Group 4: Overall Investment Appeal - Chevron presents a compelling combination of dividend income and visible earnings growth potential, with expected near-term increases in free cash flow [11] - The company is well-positioned to deliver robust total returns in the coming years, making it a strong candidate for investment [11]