CVX

Hard Work and the Trust That Binds

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Image Source: Terry Johnson By Brian Nelson, CFA We’ll have our traditional Valuentum Weekly email coming out on Sunday, and I’m excited to say our team is putting the finishing touches on our technology industry update, so we’ll have a whole bunch of fresh reports for you to look at Sunday evening/Monday morning. It’s easy to forget how much we’ve been through the past two years. Often, we forget how helpful the warning that markets were going to crash was the weekend before they did on February 22, 2020, “Is a Stock Market Crash Coming? – Coronavirus Update and P/E Ratios,” how we thought dollar-cost-averaging made sense at the bottom in March 2020, and how we went “all-in” in April … Read more

ALERT: High Yield Dividend Newsletter Portfolio Changes

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Image: Mike Cohen Summary of Changes AT&T (T) – remove Global X SuperIncome Preferred ETF (SPFF) – to 5% from 10% Vanguard Real Estate ETF (VNQ) – to 5% from 10% Chevron Corporation (CVX) – initiate at 5% ExxonMobil Corporation (XOM) – initiate at 5% Magellan Midstream Partners, L.P. (MMP) – to 5% from 2.5% Enterprise Products Partners L.P. (EPD) – to 5% from 2.5% By Brian Nelson, CFA We released the Valuentum Weekly last night, which can be accessed here , but we saved our note regarding the High Yield Dividend Newsletter portfolio changes as well as portfolio updates to today, November 8. A few weeks ago, we mentioned that we had a change of heart with AT&T (T). … Read more

Our Favorite Energy Giants Chevron and ExxonMobil are Focused on Returning Cash to Shareholders

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Image Shown: Shares of Chevron Corporation (blue line) and ExxonMobil Corporation (orange line) are both up sharply year-to-date as of this writing. By Callum Turcan Two of our favorite energy companies, Chevron Corporation (CVX) and ExxonMobil Corporation (XOM), recently reported their third quarter 2021 earnings reports. We include Chevron and ExxonMobil as ideas in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios given their ample capital appreciation upside and promising dividend growth trajectories. The top end of our fair value estimate range for Chevron and ExxonMobil stands at $144 per share and $110 per share, respectively, well above where each company’s shares are trading as of this writing. Shares of CVX yield ~4.7% and shares of XOM yield … Read more

Schlumberger Recovering, Outlook Bright

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Image Shown: Shares of Schlumberger NV are on the upswing, though the company’s stock price remains far below levels seen before the COVID-19 pandemic. By Callum Turcan On October 22, the oilfield services giant Schlumberger NV (SLB) reported third-quarter 2021 earnings that missed consensus top-line estimates and matched consensus bottom-line estimates. The company’s business continues to recover as oil & gas investment activity is picking up steam around the globe after getting decimated last year in the face of the coronavirus (‘COVID-19’) pandemic. Looking ahead, Schlumberger expects significant improvement in its mid-cycle financial performance from current levels, aided by major cost structure improvements embarked on last year. Financial Snapshot The firm’s GAAP revenues grew by 11% year-over-year due to growth … Read more

Booming Natural Gas Prices Great News for Chevron and ExxonMobil

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Image Shown: Chevron Corporation – August 2021 IR Presentation By Callum Turcan Natural gas prices in the US measured by the Henry Hub benchmark (UNG) based in Erath, Louisiana, have surged higher over the past several months. This is partially due to the slowdown in domestic oil & gas development activity that occurred back in 2020 in the wake of the coronavirus (‘COVID-19’) pandemic and low crude oil prices. Though crude oil prices, measured by the domestic WTI (USO) and international Brent (BNO) benchmarks, have since recovered, that has not resulted in domestic drilling activity returning to levels seen in 2019, though development activity has recovered somewhat. Henry Hub futures are trading north of $5 per million British thermal units … Read more

Our Two Favorite Midstream MLPs: EPD and MMP

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Image Source: Enterprise Products Partners L.P. – August 2021 IR Presentation In our High Yield Dividend Newsletter portfolio (more on that here), we include Enterprise Products Partners L.P. (EPD)—8.1% yield—and Magellan Midstream Partners L.P. (MMP)—8.7% yield—as ideas with modest “weightings” as these are our two favorite midstream master limited partnerships (‘MLPs’). The global economy is steadily recovering from the worst of the coronavirus (‘COVID-19’) pandemic, though variants of the virus remain a concern. Enterprise Products and Magellan Midstream are well-positioned to capitalize on this recovery while continuing to make good on their “generous” payout obligations. Enterprise Products  When Enterprise Products reported its second quarter 2021 earnings in late-July 2021, the midstream MLP showcased the positive impact the ongoing recovery in … Read more

ExxonMobil Continues to Optimize Its Asset Base

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Image Source: ExxonMobil Corporation – Second Quarter of 2021 IR Earnings Presentation By Callum Turcan According to Reuters, ExxonMobil Corporation (XOM) is in the process of divesting its Fayetteville shale play position in Arkansas, which ExxonMobil’s spokeswoman Julie King confirmed according to the news outlet. This is an upstream asset focused on the extraction of natural gas from the ground via “fracking” techniques (combing horizontal drilling and hydraulic fracturing to unlock raw energy resources from the ground). Divestment Overview The Fayetteville shale play was once touted as a major part of America’s way to become “energy independent” during the early days of the fracking boom. However, the play soon lost favor with energy firms large and small due to the … Read more

Chevron Posts a Great Earnings Update, Share Repurchases to Resume

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Image Shown: An overview of Chevron Corporation’s performance in the second quarter of 2021. We include shares of Chevron as an idea in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios and continue to be huge fans of the name as the global energy complex continues to recover from the worst of the coronavirus (‘COVID-19 pandemic). Image Source: Chevron Corporation – Second Quarter of 2021 IR Earnings Presentation By Callum Turcan We added shares of Chevron Corporation (CVX) as an idea to both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios back on June 27, 2021 (link here). The outlook for the global energy complex continues to improve significantly from the worst of the coronavirus (‘COVID-19’) pandemic, … Read more

Microsoft’s Dividend Is Rock Solid But Why?

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Image Shown: Valuentum’s Dividend Report on Microsoft. The Dividend Cushion Ratio Deconstruction reveals the numerator and denominator of the Dividend Cushion ratio for Microsoft. At the core, the larger the numerator, or the healthier a company’s balance sheet and future free cash flow generation, relative to the denominator, or a company’s cash dividend obligations, the more durable the dividend. In the context of the Dividend Cushion ratio, Microsoft’s numerator is larger than its denominator suggesting strong dividend coverage in the future. The Dividend Cushion Ratio Deconstruction image puts sources of free cash in the context of financial obligations next to expected cash dividend payments over the next 5 years on a side-by-side comparison. Because the Dividend Cushion ratio and many … Read more

Chinese Stocks Getting Hammered

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Image shown: A confluence of factors are driving Chinese stocks lower, not the least of which is heightened regulatory concerns. By Brian Nelson, CFA The collapse in Chinese equities (FXI) (MCHI) during the trading session July 26 is a reminder (again) why you should consider combining momentum with *enterprise valuation* in stocks, as in the Valuentum process. It’s not enough for you to think a stock is undervalued or cheap. The market must agree with you, too. A falling stock price says the market disagrees. Our favorite ideas for consideration are always in the newsletter portfolios, whether the Best Ideas Newsletter portfolio, Dividend Growth Newsletter portfolio, or High Yield Dividend Newsletter portfolio. We do not have any direct exposure to … Read more