Chevron (CVX 0.08%) is one of the top dividend stocks in the oil patch. The energy giant has increased its dividend annually for more than 35 consecutive years. It also has boosted its payout faster than the average for the S&P 500 over the last five years.
At current share prices, it offers a high dividend yield. Here's how much you'd need to invest in the oil stock now to receive $1,000 in dividend income each year.
NYSE: CVX
Key Data Points
Chevron hiked its dividend by 8% earlier this year, pushing the quarterly payout to $1.63 per share ($6.52 annually). With the stock closing Thursday just below $162 per share, that gives it roughly a 4% yield. That's several times higher than the S&P 500's average dividend yield, which was recently around 1.3%.
At that payout rate, you'd need to own 154 shares of Chevron to collect just over $1,000 of annual dividend income. If we use $162 as the share price, you'd need to invest about $24,950 into Chevron to collect about $1,000 of dividend income each year.
That could be a lot of money for you to invest, depending on your portfolio size. However, it's a lot less than the $77,000 you'd need to put into an S&P 500 index fund to produce the same amount of dividend income.
Another factor to consider is Chevron's growth. The oil company has increased its dividend at a faster pace than the average for the S&P 500 over the last five years. That trend could continue. Chevron expects to grow its free cash flow by more than 10% annually through 2027 (assuming an average oil price of around $60 a barrel). It could do even better if crude prices are higher and it closes its Hess acquisition. Chevron's growth and higher yield make it an excellent option for income investors.
