Jim Cramer: Chevron (CVX) 5% Dividend ‘Doesn’t Matter’ Because Principal ‘Could Go Down So Much’

Jim Cramer in a latest program on CNBC said that he likes Chevron Corporation (NYSE:CVX) but cannot recommend the stock because of a downward trend in oil prices.

“It’s oil related and we can’t tell where oil’s going to go so I decided I couldn’t include that even though I know Mike Wirth has done a remarkable job we got a 5% yield but I just feel like the principle could go down so much that it doesn’t matter so I got to tell you I like Chevron very much but in the end what is it an oil company and the president seems to want oil much lower can’t make money in any market when you have a president says he wants that one lower.”

TCW Relative Value Large Cap Fund stated the following regarding Chevron Corporation (NYSE:CVX) in its Q3 2024 investor letter:

“Chevron Corporation (NYSE:CVX), headquartered in San Ramon, CA, is an integrated energy company. At elimination, the stock had a $273 billion market capitalization and met all five valuation factors, including a robust 4.4% dividend yield. Chevron’s planned acquisition of Hess† would yield a strong restructuring catalyst through elimination of duplicate corporate costs and a new markets catalyst through Hess’ 30% interest in the Stabroek oilfield off Guyana; these blocks have a very low cost of supply and decades of reserves that would support strong free cash flow. While Chevron recently received Hart[1]Scott-Rodino (HSR) clearance to acquire the company, the closure timing has extended from Q4 2024 to possibly to Q2 2025 as Chevron is engaged in arbitration with peers ExxonMobil (XOM; 2.47%**) and Chinese state-owned CNOON over rights of first refusal (ROFR) for Hess’ interest in Stabroek. As Chevron’s expected arbitration resolution timeline has slipped, we believe that ExxonMobil and CNOOC’s ROFR case may have more merit than expected, thus putting the entire Hess acquisition at risk. Given an increasingly reasonable outcome that Chevron might abandon the Hess acquisition altogether, we eliminated the position in the stock.”

While we acknowledge the potential of CVX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CVX and that has 100x upside potential, check out our report about this cheapest AI stock.

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