Legendary investor Warren Buffett, known for his remarkable career returns, has not only soared with stock picks but also embraced the power of dividends. As Buffett famously remarked, “If you don’t find a way to make money while you sleep, you will work until you die.” One of his prominent dividend-paying holdings is Chevron Corp. (NYSE:CVX), the leading energy stock in Berkshire Hathaway’s extensive portfolio.
As of September 30, Berkshire held a substantial 110,248,289 shares of Chevron, making it the fifth-largest publicly traded holding with a valuation of $18.59 billion. In the volatile energy sector, Chevron experienced significant surges in 2021 and 2022 but faced a 16.3% decline in 2023.
Beyond potential stock gains, investors can tap into Chevron’s dividends, offering a quarterly payout of $1.51 per share, translating to a robust annual yield of 4.2%. Given Berkshire’s substantial holding, quarterly dividends from Chevron could reach $166.47 million.
Growing Dividends from Chevron
In January, Chevron’s board approved a commendable 6% increase in the quarterly dividend to $1.51 per share. This move positions Chevron for its 36th consecutive year of boosted annual dividend payouts—a testament to its commitment to rewarding shareholders.
For those aiming to secure $1,000 monthly dividends, equating to $3,000 quarterly, ownership of approximately 1,986.75 shares is required. This calculation is derived by dividing $3,000 by the per-share quarterly payout of $1.51. At Chevron’s current trading price of $145.66, this translates to an investment of about $289,390.
Alternatively, for a more modest goal of $200 per month or $600 per quarter, one would need 397.35 shares ($600/$1.51), equivalent to an investment of $57,878 based on Chevron’s current stock price.
While Chevron shares recently experienced a pullback, Mizuho analyst Nitin Kumar anticipates a brighter future for the oil giant, issuing a Buy rating and setting a price target of $195—a 33% increase from the current stock value.
It’s essential to recognize the inherent volatility of stocks, and even with expert opinions, thorough research and due diligence are imperative before making investment decisions.
