CVX: Anticipation -- Earnings To Be Reported At End Of Week -- January 25, 2022

Link here to Michael Fitzsimmons. Archived.

• Chevron is announcing Q4 and full-year 2021 earnings on Friday.
• Similar to the Q3 report, I expect the company to announce strong FCF - potentially another quarterly record.
• That's because oil prices in Q4 were significantly higher than in Q3 and CVX's long-term LNG contracts are linked to the price of Brent.
• Bottom line: Chevron is generating tons of FCF, yields 4.2%, and is once again buying back shares. It continues to be the best integrated oil company on the planet.

My long time followers know I have long considered Chevron to be the best global integrated oil company. That's because the company has a low-cost of supply portfolio that's heavily weighted to the price of oil and has always emphasized dividends directly to shareholders over share buybacks. 

Chevron also has arguably the strongest balance sheet in the industry and has been an excellent steward of shareholder capital. These qualities enabled Chevron to rather easily navigate the global pandemic and the benefits were apparent in the Q3 earnings report when the company generated $6.7 billion of free cash flow - the highest quarterly FCF in Chevron's long history. 

Investors should expect another stellar report this Friday when the company announces Q4 results. That's because the price of oil was significantly higher in Q4 than it was in Q3. Investors should take advantage of recent market volatility to add to their position in Chevron.