Looking for a Solid Dividend Stock? Here's Why Chevron Corporation Fits the Bill

If you're on the hunt for a safe but high-yielding dividend stock, here are three reasons that you could do a lot worse than Chevron.

Jun 17, 2014 at 9:36AM

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If there's one thing experienced investors have learned over the years, it's that dividend stocks as a group can be expected to outperform their nondividend-paying brethren.

But can the same be said of Chevron (NYSE:CVX)? As Motley Fool contributor John Maxfield discusses in the video below, the answer appears to be "yes."

In the first case, Chevron's quarterly payout has increased consistently over the last three decades, leading one to conclude that it will continue to do so. Second, its payout ratio is a mere 39%, which leaves plenty of room for both future dividend growth and organic share price appreciation via retained earnings. And third, the energy giant's price-to-earnings ratio is only 12.19, or roughly half the market average, as the S&P 500 is currently trading in excess of 20 times earnings.

Want to learn more? Check out the following video in which John delves deeper into the reasons that dividend investors love Chevron.

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John Maxfield 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.

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