Chevron Oil and Gas Stocks (New York Stock Exchange: CLC) declined after the company reported fourth quarter results last Friday. CVX shares fell more than 4% after reporting lower-than-expected earnings in its fourth quarter. However, there was plenty for investors to celebrate after the earnings, including record full-year earnings and a $75 billion share buyback program. Therefore, investors should avoid being picky and consider buying CVX shares. Therefore, we are bullish on CVX shares at this time.
Despite missing expectations for final results, Chevron’s fourth quarter results were largely positive. income for the quarter came to an impressive $54.5 billion, higher than analyst estimates of $52.7 billion. In addition, Chevron’s top-line performance has been astounding in recent years, growing at a staggering CAGR of 15.5%, with an EBITDA CAGR of ~37% as well.
In addition, the company’s unprecedented $75 billion share repurchase plan demonstrates impressive confidence and shows the company’s commitment to rewarding shareholders. At its current market capitalization, Chevron’s authorization could allow it to buy back more than a fifth of the outstanding shares.
A solid earnings performance
As discussed above, Chevron’s earnings results beat expectations on its top line but not on its bottom line. Oil and gas prices have fallen since the third quarter, resulting in a loss of profit, along with writedowns at its international operations. However, his fourth quarter net income improved to $6.35 billion of $5.05 billion in the same period last year, which is a solid result.
Chevron’s record performance in 2022 exemplifies its strength and resilience as one of the nation’s largest oil producers. Your more than doubled earnings the previous year and surpassed its previous high set in 2011 by more than $10 billion. Despite some headwinds due to higher costs and weaker oil prices, Chevron leveraged its resources to end the year with aplomb.
It’s more, CVX posted record cash flow from operations of $49.6 billion and free cash flow of $37.6 billion for the year. In addition, its leveraged free cash flow and operating cash flow increased by 122% and 70%, respectively. Therefore, the company has plenty of room to continue increasing its dividend payments and its flashy dividend buyback program.
Additionally, its fourth-quarter “Revenue and Other Income” increased 17% year-over-year to an impressive $56.47 billion. Chevron ended the year with total revenue of $246.3 billion, up from the prior year’s total of $162.5 billion.
Are CVX shares a buy, according to analysts?
As for Wall Street, CVX shares maintain a Moderate Buy consensus rating. Out of a total of 16 analyst ratings, six Buy, eight Hold and two Sell ratings have been assigned in the last three months.
Average CVX Share Price Target is $192.80, implying 12.5% upside potential. Analyst price targets range from a low of $161 per share to a high of $215 per share.
Food to go
Chevron is a fundamentally sound energy stock that has continued to demonstrate its commitment to investors through consistent dividend payments amid a challenging market. Its dividend has grown for 35 consecutive years and now yields more than 3.5%. Plus, his payout rate is just 32.4%, indicating healthy headroom for expansion. Add that to their massive buyback program, and you have arguably one of the most attractive income stocks around.
Shareholders can rely on a reliable dividend payout, increase production and reduce debt over time. The company’s debt has fallen precipitously over the last year by a whopping $7.2 billion, and we expect its debt levels to continue to fall at a healthy rate.
CVX’s complete refining, oil and natural gas logistics portfolio has made it a popular stock. Long-term investors or those looking for stability within their portfolio should consider adding Chevron before the stock rises again.
Despite the quality of its business, strong outlook and incredible track record, CVX shares are trading at 1.5 times analysts’ forward sales estimates, roughly 20% less than its five-year average multiple. In general, many things are going well for CLC at the moment.
