Chevron (CVX -0.68%) is recognized for its high-quality fundamentals as the only energy sector constituent of the Dow Jones Industrial Average. Part of the attraction of this integrated oil and gas giant is the stock's compelling 4.4% dividend yield with an impressive 37-year history of annually increasing the payout amount.
Let's explore how Chevron's dividend has evolved and what investors can expect ahead.
Chevron's dividend rate
Chevron's current quarterly dividend payout is $1.63 per share, with the latest distribution on Sept. 10, 2024. If you owned 100 shares of Chevron stock, you'd have received a $163 dividend payment.
Earlier this year, the company increased the dividend by 8% from the prior quarterly rate of $1.52, and this follows a 6% increase in both 2023 and 2022. Since 2008, Chevron's dividend payout has climbed by a compound annual growth rate of 6%.
Steady energy production growth with key investments in deepwater assets, including a strategic diversification into natural gas exposure, has supported the capital-return policy. Financial results have been impressive in recent years. Between 2021 and 2023, total revenue climbed by 27%, while earnings per share increased by an even stronger 40% over the period.
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Room for future dividend hikes
Beyond any near-term volatility in energy market prices, Chevron's strong balance sheet and approximately $18.1 billion in free cash flow generated in the trailing 12 months more than covers the annualized $11.6 billion cash dividend distribution. It's expected that Chevron will continue increasing its dividend rate annually as part of its long-standing stated financial priority, balancing the flexibility to invest toward future growth.
While an announcement hasn't yet been made, the fourth-quarter dividend payout from Chevron will likely be made in December for shareholders on record by mid-November. There's also a good chance Chevron will declare a new dividend hike in January 2025, following a pattern from recent years.
To sum it up, Chevron's stock maintains its blue chip status and can work for income-focused investors within a diversified portfolio over the long run.
