Chevron's Stock Bubbles Higher as the Dow Sheds Early Gains

Merck falls to lead a cadre of Dow losers on an up-and-down market day.

Feb 19, 2014 at 2:30PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

After a strong start to the day the markets have cooled off, and the Dow Jones Industrial Average (DJINDICES:^DJI) has shed a significant gain to land just under breakeven as of 2:30 p.m. EST. Stocks are pretty evenly split between risers and losers on the blue-chip index, despite a big day from Chevron (NYSE:CVX) helping to buoy the Dow's performance. While Big Oil has done well, Merck's (NYSE:MRK) stock has tumbled to weigh down the index. Let's catch up on what you need to know.

Can Chevron turn around its stock?
Chevron's was up 1.5% today with little big news shaking the stock, but this oil giant hasn't had a great run for investors lately. It's been one of the worst performers on the Dow over the past year, shedding more than 2%. Production troubles and waning oil prices have hampered Chevron and other oil giants, hurting company finances. But with Chevron committed to spending $40 billion on oil and gas projects to boost production, is the stock's recent dip a great opportunity for long-term investors?

Don't expect it this year, as Chevron sees production growth of less than 1% in 2014, although the company does project better performance in 2015 and 2016. With new oil fields ready to open up in locales such as Australia and the Gulf of Mexico in the next few years, Chevron should see a boost in production that will pump up its growth aims. Still, for investors, this stock's best aspect might be its tempting 3.5% dividend. Chevron is still flush with cash, and with only a 35% dividend ratio, that payout is among the most reliable around the market.

Meanwhile, shares of Big Pharma Merck are down 0.8% to rank among the Dow's leading laggards. Merck investors still are riding hopes that the company can find a buyer for its consumer health business, and early indicators are optimistic. Sources told The Wall Street Journal that bids across the health care sector could reach $10 billion for the unit, a huge prize for a company looking to focus on its core pharmaceuticals business.

It'll be on Merck's drugs to keep the stock moving if a sale is reached, but while some top pharmaceuticals such as diabetes therapies Januvia and Janumet have slowed lately, Merck hopies its pipeline can deliver success in the near future. All eyes are on developmental melanoma and cancer treatment MK-3475 and osteoporosis therapy odanacatib, the two potential blockbusters facing off with the FDA soon. The company also boasted 11 more therapies in phase 3 studies as of its most recent pipeline update in late October. Merck's research and development division has been hammered for its high spending lately, but if some of these developing drugs pan out, investors will be cheering all the way to the bank.

Have you made the right moves to secure your financial future?
Millions of Americans have waited on the sidelines since the market meltdown in 2008 and 2009, too scared to invest and put their money at further risk. Yet those who've stayed out of the market have missed out on huge gains and put their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers