Money Tree Portfolio: Investing in Chevron (CVX)

By | April 6, 2013

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Company Description: Chevron is an energy company and is engaged in every aspect of the oil and gas industry. This includes exploration, production, refining, transporting, sales, and power generation of oil and gas. Chevron is active in more than 180 countries, and has interests in 30 power projects now operating or being developed. With projects developing in North America, Africa, Asia, and the Caspian Sea area (with less concentration in the Middle East). Chevron main focus and line of business is oil, compared to its competitors. High oil prices means higher profits for this company. Daily production capacity of oil is set at 1.9 million barrels and about 4 billion cubic feet of gas. It’s refining network of 23 owned/joint venture facilities process more than 2 million barrels of oil per day. It also has retail and marketing operations in North America, Europe, West Africa, Latin America, Asia, the Middle East, and southern Africa. Chevron is also the number one jet fuel marketer in the US.

 

chevronKey financials: 

 

 

Key Statistics: 

Market Cap (intraday)5: 229.37B
Enterprise Value (Apr 5, 2013)3: 219.09B
Trailing P/E (ttm, intraday): 8.86
Forward P/E (fye Dec 31, 2014)1: 9.51
PEG Ratio (5 yr expected)1: 5.13
Price/Sales (ttm): 1.03
Price/Book (mrq): 1.68
Enterprise Value/Revenue (ttm)3: 0.98
Enterprise Value/EBITDA (ttm)6: 4.52

 

Why Buy?

Chevron has benefited from the high oil prices and is exposed to some of the best sectors and geographies in the business. It has a good track record in exploration, production, and sales/marketing operations. As you can see from its financials the company’s earnings and profit is great. As the fourth largest company by market capitalization in the world, it has a solid cash making business. This makes it a great dividend paying stock, and I suspect will continue to grow its dividends and earnings.

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