Chevron has Put a Priority on Protecting Its Big, Fat Dividend

Chevron (NYSE:CVX) stock is down 68% from its 52-week peak. And that is after having risen 33% from its lows. But all is not lost. The company has made it clear that its dividend is its major priority. The price of oil has been on a steep downturn. Along with the coronavirus impact, these two factors have been a double-whammy killing the stock. But Chevron stock now has a very enticing 7.2% dividend yield. Given the company’s stated goal of maintaining that payout, the stock is likely to have hit a bottom.

On March 24, Chevron came out with a major statement about how it would keep paying the dividend. At the end of the statement, here is what CFO Pierre Breber said: “Our focus is on protecting the dividend, prioritizing capital that drives long-term value, and supporting the balance sheet.” Chevron will cut is capital spending by over 30% in 2020, on a run-rate basis. For example, its second half 2020 capex spending will be just $7 billion, or $14 billion annualized. Chevron’s budget had plans to increase its spending by 30%.

Source: InvestorPlace

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