Operating throughout the energy value chain, Chevron (CVX +1.38%) is an industry stalwart dedicated to rewarding shareholders, so it's not surprising that many investors are keenly interested in Chevron stock. The company has come a long way from its modest beginnings in 1879 as the energy industry was starting to develop in California.
NYSE: CVX
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Now, it is a global energy industry leader, operating a vast portfolio of upstream and downstream assets. The company is also expanding beyond fossil fuels and trying to increase its presence on the burgeoning hydrogen landscape, targeting annual hydrogen production of 150,000 metric tons by 2030.
Whether you're new to the oil patch or looking to diversify your energy holdings with an oil supermajor, there are plenty of reasons why Chevron will come up on investors' radars. Let's look at the steps needed to power your portfolio with Chevron stock and some things to consider before investing in this energy powerhouse.
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How to buy Chevron stock
Whether investors are interested in energy stocks or oil stocks in particular, there are a few basic steps they must take before gassing up on a purchase of Chevron stock.
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Should I invest in Chevron?
Unfortunately, there's no blanket answer to whether investing in Chevron is a smart idea. Each investor's situation is unique, so it's important for individuals to examine their own positions thoroughly. There are several things, however, that every investor should consider before deciding whether Chevron stock would be a good fit for them.
At the top of the list of questions is whether you're interested in an oil and gas investment. Some investors are hesitant to invest in oil and gas stocks because of concerns about the environmental risks oil and gas operations pose. Not every investor believes that oil and gas stocks are smart investments. If you find yourself in this boat, Chevron stock is not the right choice for you.
Another consideration is whether you're looking to beat the market. Unless you've held Chevron stock for decades, the odds are good that Chevron stock has underperformed the market. For example, over the past decade (as of early March 2025), Chevron has provided a 128% total return, while the S&P 500 has provided a 239% total return.
Go back 25 years, though, and you'll find Chevron stock's total return edges past that of the S&P 500 -- 960% versus 558%. There's no certainty about what the future holds for Chevron stock, but its past performance can provide some useful insight.
Some investors seek the reassurance of an investing wizard like Warren Buffett to inform them on what stocks to consider. For these people, Chevron fits the bill. The stock found its way into the Berkshire Hathaway portfolio in late 2020, and it has stayed there -- in varying amounts -- ever since.
Looking to get paid for doing nothing? If you're an investor looking to generate passive income, Chevron is a worthy consideration. The company has hiked its dividend for 38 consecutive years, making it a great choice for income investors.
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The bottom line on Chevron
In light of the boom-and-bust cycles of energy prices, some investors may be wary of investing in oil and gas companies like Chevron. For people who have held Chevron stock in their portfolios for the long term, it has proven to be a great investment, outperforming the S&P 500 over the past 30 years.
Whether you're an investor interested in benefitting from upswings in energy prices, generating steady passive income, or looking for a conservative stock endorsed by sage investors like Buffett, Chevron is a compelling choice.
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About the Author
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.
