Better buy: Chevron or all 30 Dow Jones shares? | Personal finance | MCUTimes

Better buy: Chevron or all 30 Dow Jones shares? | Personal finance

Still a cash cow … normally

The graphics below open the eyes, though not surprisingly. Earnings are still nowhere near the heyday of profits between 2006 and 2012, when oil prices were so fixed and so well supported. But in addition to the short-lived price explosion in 2015 and the unpredictable (and temporary) effect of the coronavirus infection, Chevron has had enough to pay all its bills and pass on a little extra to shareholders in the form of dividends.

CVX yield data of YCharts

The long-term future looks reasonably bright enough to sustain these yields even despite efforts to ultimately eradicate the use of fossil fuels. A report released by the U.S. Energy Information Administration last year suggests that even as of 2050, 36% of U.S. electricity will still be produced from natural gas, down from the current figure of 37%. The EIA also predicts that although in the meantime it will be surpassed by renewable energy sources, global annual oil consumption will still be around 20% higher in 2050 than it is right now.

It is also worth mentioning that Chevron is still adapting to the inevitable in a future of renewable energy. The company enters into a partnership with Brightmark and CalBioEnergy, for example, to produce biomethane, and the El Segundo refinery will be the country’s first to be able to produce petrol with renewable biofuels.

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