Is Chevron Corporation (CVX) the Best Fortune 500 Dividend Stock to Buy Right Now?

Chevron Corporation (CVX), a prominent player in the energy sector, has been making waves with its consistent dividend growth and attractive yield. With a dividend yield of 4.04% as of January 2025 (TTM), CVX offers a compelling opportunity for income-oriented investors. However, is it the best Fortune 500 dividend stock to buy right now? Let's explore the data and analysis to find out.



Dividend Growth and Yield

CVX has a strong track record of dividend growth, with a streak of over 37 years. The company's annual dividend has grown at an average rate of 7.17% over the past 12 months, 6.42% over the past 36 months, 6.33% over the past 60 months, and 4.43% over the past 120 months. This consistent growth, coupled with a dividend yield of 4.04%, makes CVX an attractive option for investors seeking income and long-term growth.

Dividend Safety and Payout Ratio

CVX's dividend safety is supported by its low payout ratio of 62.19%, which indicates that the company has enough earnings to pay dividends and reinvest in the business. Additionally, CVX has a strong financial position and a consistent history of paying dividends, further enhancing its dividend safety.

Asset Sales and Capital Expenditure Reduction

CVX has been focusing on strengthening its balance sheet by divesting non-core positions and optimizing capital expenditure. These strategic moves are expected to boost the company's free cash flow, which can be used to fund dividends and share buybacks. In Q3 2024, CVX returned $7.7 billion to shareholders through dividends and share buybacks, demonstrating the company's commitment to returning value to shareholders.

Comparison with Other Fortune 500 Companies

To determine if CVX is the best Fortune 500 dividend stock to buy right now, we can compare its dividend yield with other prominent energy companies:

1. BP p.l.c. (BP) - 5.85%
2. Shell plc (SHEL) - 4.21%
3. Petróleo Brasileiro S.A. - Petrobras (PBR) - 21.24%
4. Suncor Energy Inc. (SU) - 3.91%
5. TotalEnergies SE (TTE) - 5.56%
6. Exxon Mobil Corporation (XOM) - 3.42%
7. Equinor ASA (EQNR) - 3.84%
8. Cenovus Energy Inc. (CVE) - 3.74%
9. Imperial Oil Limited (IMO) - 2.43%
10. Ecopetrol S.A. (EC) - 0.00%
11. YPF Sociedad Anónima (YPF) - 0%

CVX's dividend yield of 4.04% is lower than BP, Shell, Petrobras, and TotalEnergies, but higher than Exxon Mobil, Equinor, Cenovus, Imperial Oil, Ecopetrol, and YPF. CVX's dividend yield is also slightly lower than Suncor Energy's.

Conclusion

Based on the data and analysis, Chevron Corporation (CVX) is a strong contender for the best Fortune 500 dividend stock to buy right now. Its consistent dividend growth, attractive yield, dividend safety, and commitment to returning value to shareholders make it an appealing option for income-oriented investors. However, investors should also consider other factors, such as the company's financial health, growth prospects, and the broader market conditions, before making a final decision.