…While Chevron goes south for natural gas
The other biggest “baby Standard,” Chevron Corporation (NYSE:CVX), also put up impressive first quarter earnings and is also expanding operations in other parts of the world as well. Its $6.2 billion in income meant there was a $300 million drop year-over-year, a similar drop to Exxon, but still an indicator of strength for the company’s bottom line. Despite the drop-off in income, possibly tied to the decrease in crude oil prices from 2012, Chevron Corporation (NYSE:CVX) churned out 2.65 million barrels per day, 20,000 more than the first quarter of 2012, as well as investing $8.9 billion in capital expenditures and investment, up $2.5 billion year-over-year.
Chevron Corporation (NYSE:CVX) is also growing its global footprint like Exxon. In Angola, the first cargo load of liquefied natural gas (LNG) went out from Chevron subsidy Cabinda Gulf Oil Company. This comes from a competitive natural gas area, since Exxon also has representation here, but Cabinda’s site is capable, at full capacity, of churning out 63,000 barrels/day of LNE, and 5.2 million metric tons per year, valued at roughly $130 million/year on that site alone, although Chevron Corporation (NYSE:CVX) only has a 36% stake in the land. It is still a good haul for natural gas, and with increasing worldwide demand for natural gas as an alternative to oil, Chevron Corporation (NYSE:CVX) may be well positioned for the future of natural gas with access to this site, even though natural gas isn’t as lucrative as oil.
Both great, but one a little more so
Both companies are solid investments, with low forward P/E, high dividend yields (over 2.8% annually), and solid E/P ratios of over 10%, but Chevron Corporation (NYSE:CVX) is the better buy. It has a 3.4% dividend yield now that the quarterly payment will be $1 per share for the first time ever, which is pretty high by market standards. Also, it has a stronger profit margin at 11.9% with earnings per share at $13.23, all higher than Exxon Mobil Corporation (NYSE:XOM). Its positions in natural gas also make this company a good stock for the long haul, as natural gas grows in demand and hopefully enjoys price increases.
Standard Oil may be long gone, but its babies are still roaming the forests and foothills of the Earth, searching like Rockefeller for the next big market.
The article A Financial Salute to America: Part I – Black Gold originally appeared on Fool.com and is written by John McKenna.
John McKenna has no position in any stocks mentioned. The Motley Fool recommends Chevron. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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