Chevron Tests Transition Middle Ground

Copyright © 2021 Energy Intelligence Group
Earns Chevron

Just how much flexibility might investors give major US oil companies to chart less aggressive energy transition strategies? Chevron is the most critical case study to watch. The firm has built up shareholder goodwill thanks to growing dividends and balance sheet conservatism, and it recently accelerated and expanded plans to diversity into biofuels, hydrogen and carbon capture. But its strategy will have only a modest impact on its emissions this decade, begging the question — is it enough? Chevron was the only Western major to grow its dividend through the pandemic-led downturn, and its 5% dividend yield is nearly four times the S&P 500’s current yield. It meanwhile holds the lowest debt of its peers. Chevron’s strong relative financial performance has its shares trading at the highest price-to-earnings ratio of the group, yet nearly 60% of analysts still have a “buy” recommendation. None guide to “sell.” Shares of heavily punished Exxon Mobil and BP have rebounded the strongest alongside oil prices over the past year, but Chevron and TotalEnergies remain the top performers over a two to five-year period.

Opec-plus kept its powder dry and stuck with its agreed output relaxation schedule in the face of the new Omicron demand threat.
Thu, Dec 2, 2021
The big question facing European oil majors ahead is whether to keep their oil and low-carbon businesses together or split them off.
Thu, Dec 2, 2021
Mark Lewis, head of climate research at Andurand Capital, says climate action has advanced on many fronts — especially around carbon trading.
Wed, Dec 1, 2021