Chevron Stock (NYSE:CVX)
Chevron stock gained 3.6% in early trading on Thursday after the company announced intentions to buy $75 billion of its shares and raise its quarterly dividend by 6%. These steps are likely to auger well for Chevron’s (NYSE:CVX) forthcoming quarterly results and long-term expectations.
Chevron stock had a closing price of $179.08 on Wednesday, giving them a dividend yield of 3.4%, which is higher than Exxon Mobil’s yield of 3.2%.
According to John Royall, an analyst at J.P. Morgan, if Chevron were to maintain the top end of the current long-term share buyback guidance of $5B-$15B, the full authorization would be exhausted in five years. The analyst believes the higher buyback authorization “could signal higher top-end guidance, perhaps a bump to $5B-$20B.”
A representative from RBC Capital named Biraj Borkhataria said that even though the new repurchase program does not have an end date, “we think it possible that Chevron raises its quarterly buyback run-rate from the current $3.75B, underpinned by its solid balance sheet.”
Doug Leggate, who works at Bank of America, was quoted as saying that the repurchase plan “acknowledges a balance sheet going towards zero net debt and speaks to the balancing act senior management has navigated between capital discipline and sustained dividend growth.”
In comparison to the previous year, Chevron has seen its earnings increase by an average of 200% over the past three quarters. In the most recent quarter, the company exceeded analysts’ earnings projections by a significant margin, as its earnings per share increased by 88% to $5.56. In contrast, its sales increased to an all-time high of $66.6 billion.
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