Warren Buffett's Favorite Energy Stock Is In Debt Reduction Mode. Earnings Up Next.
Berkshire Hathaway's Buffett owned Chevron stock is currently up 56% over the past year.
Chevron is currently paying consistent dividends with a low 3.47% yield, making it a dividend stock that is worth looking at due to its stability and consistent performance compared to its competitors within the oil and gas industry.
Chevron to announce Q3 earnings on Oct. 28
Chevron's competitors have reported strong Q3 earnings, which could indicate that Chevron could have a strong earnings report as well. Notably, Chevron earned $11.62 billion in its second quarter, more than double what it earned in the same period a year earlier due to higher oil and gas prices.
Chevron is reducing its debt
Chevron used its recent profits to reduce its debt by $3.4 billion as part of a larger effort to pay down $15 billion in debt. As a result of its debt-reduction efforts, Chevron's debt-to-asset ratio has improved to 19%.
Chevron is buying back shares at a record pace
Chevron is using the rest of its excess cash to buy back its shares. The company repurchased $3 billion worth of shares in the second quarter and plans to continue buying back shares for the foreseeable future. Chevron's share buyback program is a positive sign for investors because it shows that the company is confident in its future prospects.
Is Chevron a good investment?
Chevron is a well-run company with a strong financial position. The company is a major player in the oil and gas industry and is well-positioned to benefit from rising oil and gas prices. Chevron is also committed to reducing its debt and returning cash to shareholders through dividends and share buybacks. As a result, Chevron is a good investment for investors seeking exposure to the energy sector.
Key takeaways
- Chevron is a well-run company with a strong financial position.
- The company is a major player in the oil and gas industry and is well-positioned to benefit from rising oil and gas prices.
- Chevron is committed to reducing its debt and returning cash to shareholders through dividends and share buybacks.
- As a result, Chevron is a good investment for investors seeking exposure to the energy sector.
