3. Chevron Corporation (NYSE:CVX)
Dividend Yield as of December 29: 4.51%
Number of Hedge Funds: 51
Chevron Corporation (NYSE:CVX) is a San Ramon, California-based oil company that was one of the offspring of John D. Rockefeller’s Standard Oil Corporation. The company has a presence in over 180 countries either through its exploration and production, transportation and logistics, or refining and marketing segments. Chevron Corporation (NYSE:CVX) has been raising its annual dividend for the past 34 consecutive years, which makes it a member of the Dividend Aristocrat list. Chevron paid a quarterly dividend per share of $1.34 on December 10, translating into a forward dividend yield of 4.51% as of December 29.
Chevron Corporation (NYSE:CVX) announced that it sees its share repurchase to be around $3 billion to $5 billion as opposed to the previous guidance of $2 billion to $3 billion. In case the company maintains or increases its dividend going forward, it will have a favorable impact on the dividend yield of Chevron Corporation owing to lower outstanding shares.
Goehring & Rozencwajg Associates shared its stance on Chevron Corporation (NYSE:CVX) in its Q3 2021 investor letter. Here’s what the investment management firm said:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects. According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
