Chevron Stock: 3 Reasons to Buy Despite Recent Mediocre Performance

Chevron has a low-risk business model with a break-even level of around $30 per barrel, enabling it to produce cash flow even at lower oil prices. The company has a fortress balance sheet with a net debt ratio of 14.8% and is set to reap the rewards of long-cycle projects, including its Future Growth Project in Kazakhstan and new developments in the Gulf of Mexico. Chevron's acquisition of Hess will add $2.5 billion to its free cash flow next year, extending its growth outlook into the 2030s.

Chevron Corporation (CVX) continues to demonstrate a robust financial profile, with a low-risk business model and promising growth prospects. The company's recent 13F filing reveals that it has reduced its stake in Chevron by 10.5%, selling over 1.4 million shares [1]. Despite this reduction, Chevron remains a significant player in the oil and gas sector, owning approximately 12.3 million shares valued at $2.06 billion [1].

Chevron's low-risk business model is evident in its ability to generate cash flow even at lower oil prices. The company's break-even level of around $30 per barrel allows it to maintain profitability in a volatile market. This is complemented by Chevron's fortress balance sheet, with a net debt ratio of 14.8%, well below its target range of 20%-25% [1].

The company is set to reap the rewards of several long-cycle projects. The Future Growth Project in Kazakhstan, which achieved first oil earlier this year, is ramping up to full capacity. Additionally, Chevron has completed new developments in the Gulf of Mexico, contributing to an expected incremental $10 billion in annual free cash flow next year [1]. These projects are part of Chevron's broader strategy to expand its business during oil market downturns.

Chevron's acquisition of Hess, initially signed in late 2023 and closed in July 2025, is expected to add $2.5 billion to its free cash flow next year. This merger will extend Chevron's visible production and free cash flow growth outlook into the 2030s, further enhancing its long-term growth prospects [1].

In conclusion, Chevron's low-risk business model, robust balance sheet, and promising long-cycle projects position it well for future growth. Investors should closely monitor Chevron's progress and potential dividend announcements, such as the recent quarterly dividend of $1.71 per share, paid on September 10, 2025 [1].

References:
[1] https://www.marketbeat.com/instant-alerts/filing-price-t-rowe-associates-inc-md-decreases-stake-in-chevron-corporation-cvx-2025-08-21/