For a guy who loves to invest, Warren Buffett isn't doing much of it these days. In the fourth quarter of 2023, Buffett bought only three stocks for Berkshire Hathaway's portfolio. Chevron (CVX 0.37%) was one of them.

Buffett increased Berkshire's stake in the oil and gas giant by 14.4% in Q4. Chevron ranks as the fifth-largest holding in the conglomerate's portfolio. The simple fact: Buffett is loading up on this high-yield dividend stock. Here are four reasons why I am too.

1. The price is right

By most metrics, the stock market is priced at a premium. The S&P 500, for example, trades at more than 21 times forward earnings. The long-term average price-to-earnings ratio for the index is around 16.

Chevron stands out as a breath of valuation sanity in a highly priced market. The oil stock trades at a forward earnings multiple of roughly 12. That's way below the S&P 500's multiple and is lower than the energy sector's valuation.

This attractive valuation isn't because Chevron is struggling, though. The company generated revenue of nearly $201 billion last year. It posted a profit of $21.4 billion. Chevron ended 2023 with a cash stockpile totaling $8.2 billion.

2. Expectations of rising oil prices

Chevron's fortunes hinge on oil prices. If prices are too low, the company can't make money. But if they're high, Chevron mints money. I expect oil prices will rise in the coming years. I suspect that Buffett agrees.

The legendary investor hasn't flat-out stated that he predicts higher oil prices. However, he told CNBC last year that he fully anticipates oil production levels will remain at least at current levels five years from now despite the increasing adoption of renewable energy sources.

Buffett is also a big fan of Occidental Petroleum CEO Vicki Hollub. (Unsurprisingly, he's also buying Oxy stock hand over fist.) Hollub recently said there will be a supply shortage in global oil markets by late 2025. And she believes the supply issue will be long-term.

I'm unsure about Hollub's timing, although she could be right. However, I won't be surprised if increasing demand combined with relatively stable production levels causes a shortage in the not-too-distant future. If it happens, Chevron will be a big winner.

3. A $4 trillion lottery ticket

One of Chevron's top rivals, ExxonMobil, thinks the carbon capture and storage market could reach $4 trillion by 2050. It's investing heavily in developing the technology. So is Chevron.

By 2030, Chevron hopes to capture 25 million metric tons of carbon dioxide annually. The company's Bayou Bend carbon storage project ranks as one of the largest in the country with a storage capacity of more than 1 billion metric tons.

There are plenty of technological hurdles to jump for carbon capture to fulfill its potential. Maybe it never will. However, I view carbon capture as a nice extra lottery ticket that comes with investing in Chevron.

4. Get paid to wait

Granted, oil prices haven't risen yet and carbon capture remains a dream for now. I like, though, that Chevron pays me to wait -- and pays handsomely.

The company's dividend yield currently stands at nearly 4.2%. Chevron has increased its dividend payout for 37 consecutive years. It boasts the most impressive dividend growth rate over the last five years in the oil and gas industry -- more than double its nearest rival.

Dividends aren't the only way Chevron pays investors to wait, though. The company returned nearly $15 billion to shareholders last year through stock buybacks, a 32% increase from 2022.

Pay attention to Buffett's moves

I don't think anyone should buy a stock just because Buffett does; I didn't. However, it's smart to pay attention when he appears to be especially bullish about a stock. His reasons for investing could be compelling. Although Buffett hasn't said why he's upping Berkshire's stake in Chevron, I suspect his rationale is similar to mine.