We recently published a list of 10 Most Profitable Value Stocks to Buy Now. In this article, we are going to take a look at where Chevron Corp. (NYSE:CVX) stands against other profitable value stocks to buy now.

Matt Powers, Managing Partner at Powers Advisory Group, joined the discussion on CNBC’s ‘Power Lunch’ on March 11 to provide insights into the shift from growth to value investing and the resurgence of traditional dividend strategies. Powers emphasized that this transition has become increasingly evident, particularly following last week’s market activity and the events of March 10. He noted that while the market behavior on March 11 might tell a slightly different story, the broader trend is unmistakable. For years, growth stocks dominated portfolios, but now investors are gravitating toward value and dividend investing, which had been largely overlooked for over a decade. Powers attributed this shift to various catalysts, which included tariffs and policy uncertainty from Washington and President Trump’s unpredictable stances. He described investors as exhausted, and welcomed the normalization of equity markets and a return to diversification and traditional investing.

Powers highlighted the importance of diversification, contrasting high-growth portfolios with those focused on dividends. He pointed out that ETFs have outperformed large-cap growth funds year-to-date, with a notable 11-point difference in returns. The dividend fund is up 5%, while the large-cap growth fund is down 6%. He explained that tech stocks dominate large-cap growth funds and account for nearly half of their portfolios. In contrast, dividend-focused funds are more diversified across sectors such as healthcare, financials, and staples. This diversification reduces concentration risk and provides defensive characteristics in an uncertain market environment. Powers elaborated on the leadership shift between these two types of funds. While growth ETFs feature holdings like the MAG7, dividend ETFs focus on blue-chip companies. A year ago, growth stocks were investor favorites, but now value stocks are taking the lead, which is a trend reflected in their performance. He stressed the importance of broadening diversification within portfolios and not ignoring value opportunities.

Methodology

We sifted through the Finviz stock screener to compile a list of the top stocks with a forward P/E ratio under 15. We then selected the 10 stocks with a TTM net income greater than $1 billion and that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024.

Note: All data was recorded on March 13.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Chevron Corp. (NYSE:CVX)

TTM Net Income as of March 13: $17.661 billion

Forward P/E Ratio as of March 13: 13.53

Number of Hedge Fund Holders: 81

Chevron Corp. (NYSE:CVX) is an energy company that is involved in all aspects of the oil and gas industry, from exploration and production to refining and marketing. It operates through its Upstream and Downstream segments. It also focuses on LNG, petrochemicals, and renewable energy, and serves markets worldwide.

The company’s Upstream segment, especially its Permian Basin operations, is the company’s growth engine. In 2024, Permian production grew by nearly 18%, which was driven by efficient drilling and completion methods. This allowed the company to achieve record production with 40% fewer rigs. Permian output is expected to hit one million barrels of oil equivalent per day in 2025.

The company’s new oil project in Kazakhstan is now producing and adding significant output and is expected to generate billions in cash flow. Its Gulf of Mexico operations are also expanding towards 300,000 barrels per day. The company has projects in Western Australia, West Africa, and the Eastern Mediterranean. Chevron Corp. (NYSE:CVX) aims to maintain capital discipline and targets $2 to $3 billion in structural cost reductions by 2026. The company anticipates production growth of around 6% annually through 2026, and expects to add $10 billion of annual free cash flow by 2026.

Overall, Chevron Corp. (NYSE:CVX) ranks 10th on our list of the most profitable value stocks to buy now. While we acknowledge the growth potential of CVX as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CVX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.