Tuesday, May 1, 2012

For Investors Only: CVX

July 3, 2013: CVX moves 400 employees from its HQ in San Ramon (CA) to Houston; building a new building in Houston; says they are keeping HQ in San Ramon (CA). Sure. 

June 17, 2013: CVX to sell $6 billion in bonds; one of the largest deals this year; largest deal for CVX since at least 1995.

May 29, 2013: highlights of CVX 2013 Annual Stockholder Meeting.

January 28, 2013: ex-judge says he was bribed by the Equadorians who are suing CVX. I think I've heard this before.

October 10, 2012: share price of CVX is taking a real hit today after CVX said it's 2Q12 earnings would be significantly lower due to Hurricane/Tropical Storm Isaac. More concerning to me was the refusal of the US Supreme Court to rule in favor of CVX vs Ecuador. I assume these things will take care of themselves over time but it's hard to say. If one is optimistic about the company, this provides another entry point for CVX. It goes ex-dividend around November 15, and will be paying a nice dividend. It has increased its dividend in both May, 2012, and November, 2011. If the company does not have plans for its cash horde, and feels comfortable despite the US Supreme Court ruling, it's very possible CVX could reward its shareholders for sticking with them during this minor setback in production goals. Smile. Perhaps wishful thinking. [Note the disclaimer for this site: it is not an investment site; make no investment decisions on what you read here.]

October 7, 2012: strong dividend growth should continue. Link to a SeekingAlpha.com article.
CVX had about $253.7 billion in revenue in 2011, up 24% from 2010. However this growth is not projected to continue into 2012 and 2013 when analysts target about $252 billion and $262 billion respectively. CVX has a market capitalization of $230.6 billion and an enterprise value of $219.3 billion, shows almost no debt. CVX has about $10.2 billion in debt, but over $21 billion in cash and equivalents. CVX has a strong track record of paying dividends. For 2011, its payout ratio to net income was 23% and its payout to operating cash flow was 15%. While CVX primarily returns capital to shareholders through dividends, CVX did repurchase over $3 billion of shares in 2011, up substantially from the two previous years.
September 11, 2012: Cash horde. The article mentioned only Hess and CHK as possible takeover candidates. I doubt either.
Having checked the balance sheet of its bigger competitor Exxon Mobil, I could plainly see that Chevron has more cash on hand. This could be seen by the end of 2011, when Chevron had increased the cash carried on the balance sheet by nearly 13 percent over the previous year.

As of June 30, Chevron was sitting on a $21.46 billion war chest in total cash and had a staggering $10.65 billion in levered free cash flow (trailing 12 months). In comparison, Exxon Mobil had $17.8 billion in total cash and $15.58 billion in levered free cash flow (trailing 12 months). 
As recently as Aug. 28, The Wall Street Journal, in a story titled “Chevron Cash Fuels Deal Talk,” reported the investment community has been buzzing about what Chevron is planning to do with all that cash. “Even if Chevron used the money to retire its debt,” the Journal mused, “it would still have about $11 billion left over.” 
May 1, 2012, link here -- SeekingAlpha.com.
The company's earnings per share rose (from $3.09 to $3.27) as have the total earnings, from $6.2 to $6.5 billion (1Q12).
These earnings fell short of analysts' expectations of $3.31 per share. The main reason for the setback is the decreased production of oil from 2.76 million barrels a day to 2.63 million barrels of oil per day, but we think the setback is temporary. 
Chevron is also raising its yield (up by 11% to 90 cents a share). These excellent gains are definitely a cause for excitement, but should be closely watched until the company is able to boost its oil production. 
May 1, 2012, link here -- Motley Fool.com.
With earnings season essentially having been relegated to history for the major oil companies, it's difficult not to be impressed by the scope and direction of Chevron, the second-largest of the U.S.-based integrated companies, and Royal Dutch Shell, its Anglo-Dutch peer.  
In an overall evaluation of all the companies, including their relative approaches to their businesses and their geographic concentrations, one is likely to find the California-based company about as compelling as is Shell. 
Disclaimer: this is not an investment site; this is not a recommendation to buy, sell, or hold any shares mentioned in these articles.

I am placing this here for future reference.

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