Warren Buffett has seen his share of bear markets over the years. Since the end of World War II, shortly after Buffett started investing, there have been 14 bear markets, with one occurring every 5.4 years, on average. That's given Buffett a lot of experience investing in them.

A theme we can see in the stocks Warren Buffett owns in the current bear market is that he favors companies that provide him with passive income through dividend payments. One of his top dividend stocks is oil-giant Chevron (CVX -1.50%), which he has continued to buy amid the bear market. Here's what makes Chevron such a great passive-income investment.

Loading up on Chevron

Warren Buffett's Berkshire Hathaway (BRK.A -0.01%) (BRK.B -0.09%) has been buying shares of Chevron hand over fist in the past year. Berkshire purchased another 2.4 million shares of Chevron during the second quarter. It now holds over 163.5 million shares, about 8.4% of the company's total outstanding shares.

That makes Chevron Buffett's third-largest holding at 8.4% of his portfolio, with a position worth over $27 billion. At Chevron's current quarterly dividend payment of $1.42 per share ($5.68 per share annualized), Buffett will collect nearly $929 million of annual passive income from this investment. That will give Buffett a lot of cash he can invest during a bear market.

An attractive income stream

Buffett is collecting so much passive income from Chevron because it offers a high dividend yield that's currently nearly 3.5%. That's almost double the approximately 1.8% yield of an S&P 500 index fund.

To put that into a different context, every $1,000 invested in Chevron would produce $34.50 of annual passive income. For comparison's sake, a $1,000 investment in an S&P 500 index fund would make about $17.60 of annual passive income.

The oil giant can easily afford that big-time payout. Chevron produced $21.8 billion in cash flow from operations during the first half of this year. It made $6.7 billion of capital investments while paying out $5.5 billion in dividends. That left it with $9.6 billion of post-dividend free cash flow.

It used that money to repay debt and repurchase shares. Chevron ended the second quarter with a net debt ratio of 8%, well below its 20% to 25% target range. Because of that, it has ample financial flexibility to withstand another oil-price decline.

An elite track record

Another thing that stands out about Chevron's dividend is its growth track record. Chevron has increased its payout for 35 straight years, putting it in the elite class of Dividend Aristocrats.

Chevron has proven its ability to grow its payout throughout the oil-market cycle. It increased the dividend by 6% earlier this year. Chevron's payout had grown by 20% since before the pandemic and doubled since 2010. That's impressive, considering the volatility of oil prices during this period, which forced many peers to reduce their dividends.

Chevron should be able to continue growing its dividend in the future. While there's a lot of uncertainty about the future of fossil fuels due to climate-change concerns, the International Energy Agency expects oil and gas demand to continue growing through at least 2040. That should benefit Chevron's traditional energy business, which the company continues investing in to drive production growth.

Meanwhile, the company has already started investing in the fuels of the future. It accelerated its lower carbon ambitions late last year. It plans to invest more than $10 billion through 2028 -- more than triple its prior guidance -- to grow its renewable natural gas, renewable fuels, hydrogen, and carbon-capture capabilities. The company took a big step toward achieving its renewable fuel goal earlier this year by acquiring leading producer Renewable Energy Group for over $3 billion.

Chevron's dual strategy to grow its traditional and new energy businesses should enable the company to continue growing its cash flows over the long term. That should give Chevron the fuel to keep increasing its dividend.

Cashing in on bear markets

Warren Buffett has been buying more shares of oil-giant Chevron during the current bear market. That allows him to collect even more passive income, given the oil-giant's above-average dividend yield.

Add in its elite growth track record, and Chevron can be a great foundational stock to consider buying during a bear market. The dividend payment provides a tangible return while giving investors additional cash they can use to buy more stocks.