Chevron's Latest 5-Yr Plan Implies a Major Dividend Hike - CXX Stock Looks Cheap

Core Viewpoint - Chevron Corp. has outlined a sustainable cash flow plan that suggests a significant potential for dividend increases, with a historical average growth of 7% over the past 25 years, outperforming its competitors [1][4]. Dividend Performance - Chevron's current annual dividend per share (DPS) is $6.84, resulting in a dividend yield of 4.56% based on the stock price of $149.98 [3]. - The company has a 38-year history of increasing its DPS, with expectations for a minimum 5% increase in the upcoming January dividend [3][4]. - Projections indicate that the DPS could rise to $7.18, leading to a future yield of approximately 4.8% [4]. Share Repurchase Strategy - Chevron has a strong track record of share repurchases, having bought back shares in 18 of the last 22 years, with plans to repurchase $10 to $20 billion annually through 2030 [4]. - The company emphasizes its commitment to superior shareholder returns and intends to maintain its leadership in dividend growth and consistent share repurchases throughout the commodity cycle [4]. Market Context - The average dividend yield for Chevron stock over the past five years has been reported at 4.08%, with other sources indicating yields of 4.40% and 4.21% [6]. - There is an expectation that Chevron's stock will revert to an average yield of 4.21%, which could influence future stock price targets [6].