Is Chevron Stock a Buy?

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When Chevron (NYSE: CVX) reported fourth-quarter 2020 earnings, CEO Mike Wirth described it as “an unprecedented year.” That’s an understatement, given that oil prices actually fell below zero at one point. But the oil giant muddled through, and is strongly positioned to benefit as oil prices rebound. Here are some key points to consider if you are looking at this integrated energy giant with a fat 5.8% dividend yield. 

The one place where Chevron shines particularly bright is its balance sheet. Although the company has yet to file its annual report, it ended the third quarter with a debt to equity ratio of roughly 0.26 times, the lowest of its peer group. The closest competitor was ExxonMobil (NYSE: XOM), with a ratio of 0.39 times. The key here, however, is that the two companies actually traded places: Historically Exxon had the better debt to equity ratio, but the 2020 energy industry downturn changed that in a big way because of the company’s heavy capital spending plans.

Image source: Getty Images.

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