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- Is Chevron an Undervalued Dividend Stock? | CVX Stock Analysis
Is Chevron an Undervalued Dividend Stock? | CVX Stock Analysis
Discover whether Chevron Corporation is an undervalued dividend stock to consider for your investment portfolio. Gain insights into the potential risks and rewards of investing in Chevron stock with an analysis of the company's performance and future outlook in a transitioning energy market.
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Video Transcript
Chevron Corporation is an interesting
dividend stock to consider on the one
hand the business is booming profits are
soaring and cash flow is increasing on
the other hand longer term worldwide
governments are working to move away
from fossil fuels and that could
endanger the company's cash flows in the
longer term so in this situation I've
modeled the valuation of this company
incorporating the fact that in the
longer term the company will lose market
share in that industry so I want to
share with you what I think is a fair
price to pay for Chevron stock given
that the longer term does not look very
exciting for these types of
businesses I want to thank the mly fool
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all right so my cash flow valuation
model for Sherron Corporation has three
distinct sections I'm going I'm going to
specifically point out the section when
I get to it where I've evaluated how
Sheron Corporation will adapt in the
long run how the business will adjust to
the changing
circumstances that governments are
trying to move away from fossil fuels
they're trying to encourage people to
purchase electric vehicles and how that
will impact the company's valuation I'll
spend some time detailing that where I
have that incorporated in this model
model but first let's start with the
free cash flow
forecasts and so in 2024 Chevron
Corporation likely generated $15 billion
in free cash flow and that's expected to
increase to 25.6 billion dollar by
2029 and this is according to Wall
Street analysts that are following
Chevron stock they still believe the
company is going to increase its free
cash flow by roughly $10 billion over
the next five or so years so the near
term looks very strong for Chevron
Corporation from 2029 to
2034 I'm forecasting that the company's