Has Chevron Corporation (CVX) Become the Perfect Stock?

The pressure on revenue that Chevron has seen lately has come from a combination of production pressures and weak energy prices that have plagued the entire industry. In its most recent quarter, for instance, Exxon Mobil Corporation (NYSE:XOM) reported declining production, even as Chevron managed to post a modest production increase. What saved both companies, though, was strength in their refining segments, with prices on gasoline, heating oil, and other distillates at extremely high levels compared with crude, especially inexpensive West Texas Intermediate.

But Chevron has been setting up a number of partnerships to exploit new production opportunities around the world. Last month, it signed a deal with China’s CNOOC Limited (ADR) (NYSE:CEO) to explore the Pearl River Mouth Basin in the South China Sea, and just last week, Chevron confirmed that it will continue developing a field off the coast of Angola alongside partners that include Sonangol, TOTAL S.A. (ADR) (NYSE:TOT), and Eni. Along with many other ventures, Chevron has the potential to see dramatic gains in oil and gas production from these plays.

One interesting speculation for future growth is the possibility that Chevron might buy out Chesapeake Energy Corporation (NYSE:CHK) . With Chesapeake CEO Aubrey McClendon leaving the company, some believe that the stage is set for a buyout, and with a solid balance sheet, Chevron has the resources to pick up Chesapeake’s huge range of natural gas assets.

For Chevron to improve, it needs to get revenue moving back in the right direction. Once that happens, a faster-growing dividend for the Dividend Aristocrat shouldn’t be too hard to accomplish, helping Chevron move even closer to perfection.

The article Has Chevron Become the Perfect Stock? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Chevron and Total and has options positions on Chesapeake Energy.

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