Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Against that uncertain backdrop, a slew of major companies have cut or even abandoned their dividends. Don't assume, however, that the boards of Exxon and Chevron won't make the hard call to cut their dividends if need be. Why ExxonMobil, Chevron, and BP Rallied by as Much as 25% in November, Why ExxonMobil, Phillips 66, and Apache Stocks Popped Today, ExxonMobil to Record a Historic Writedown Approaching $20 Billion, Why ExxonMobil, Phillips 66, and ConocoPhillips Stocks Crashed Today, Copyright, Trademark and Patent Information. Facing these realities, Shell on April 30 announced its first dividend cut since World War II. Most stock quote data provided by BATS. Chevron pays an annual dividend of $5.16 per share, with a dividend yield of 5.53%. This company had a streak of 47 annual dividend hikes under its belt, but still felt it necessary to cut the dividend in March. by drowning American frackers in a sea of cheap crude. "But is a discount like that material enough to think that the dividend is going to be cut or seriously reduced? Trade CVX using the Dividend Capture Strategy But if the dip turns into something more, they will be forced to change those plans. Chevron is the only oil major with a Safe Dividend Safety Score, driven by the firm's strong balance sheet. The first and most important thing to remember about dividend decisions is that, for the most part, they are entirely up to the board of directors. New York (CNN Business)Chevron is pulling out all the stops to cope with the historic collapse in oil prices. I don't think it really is." Chevron Stock Has a Safe Dividend in 2020 Chevron has already announced a dividend increase for 2020. But an even better example could be energy services company Helmerich & Payne (NYSE:HP). Chevron, which traces its roots to 1879, hasn't cut its dividend since 1934 during the Great Depression. And companies can generate cash outside of earnings. Chevron's annual streak isn't that far behind at 33 years. Starting out with much lower leverage, Exxon and Chevron have more balance sheet flexibility -- which they are using to protect their dividends. The company has resisted leaving Venezuela, arguing its presence was a stabilizing presence and supported local workers. That's not good news for Exxon or Chevron, since earnings could remain under pressure for a long time. That should sound pretty similar to what's going on at Helmerich & Payne's customers, a list that includes names like Exxon and Chevron. If oil prices don't recover at some point the dividends here will eventually get cut. Chevron’s dividend yield is about 5.9%, and Exxon’s yield is 8.7%. Can the US, Russia and Saudi Arabia find a compromise on oil? This decision was a hard one, driven by the need to maintain capital spending plans in a capital-intensive business even though revenue was under pressure. In late January, Chevron boosted its dividend by 8%, marking the 33rd straight year of increases. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. providing federal assistance to the shale industry. At the end of the first quarter, Chevron's total long-term debt had increased roughly 20% from the start of the year. With too much oil and too little demand, oil prices have plummeted to historic lows. Chevron very nearly added a great deal of risk to its empire last year. "We believe in free markets. At the same time, Saudi Arabia and Russia are in the middle of an epic price war that is flooding the market with supply at the worst possible time. CVX Dividend Growth. That would be low for any company in any industry. "They didn't phone me up and tell me. But the real hit was the global economic shutdown from COVID-19, which led to a swift decline in demand. Shell and Equinor have historically operated with more leverage, offsetting that risk with sizable cash balances. That said, dividends are paid out of cash flow and not earnings. That's sent the energy sector reeling, with bankruptcies, spending cuts, and cost containment efforts all viable avenues for companies looking to get through this historically difficult period. Updated 2334 GMT (0734 HKT) March 24, 2020. High levels of leverage limit financial flexibility in tough times, because increasing leverage even more in a downturn isn't a desirable move. These are not equivalent options, as the current situation shows. The company reached a deal in April, Today, Occidental is in turmoil because that deal, "We've moved on from that," Wirth said of the Anadarko bidding war. Chevron remains focused on keeping up its dividend payments. Given where oil prices have plunged to, it increasingly looks like Chevron won that bidding war by losing it. That's easy for a company the size of Chevron to say. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. ... Chevron has always put people at the center of the energy conversation. 1 Year Annualized Growth 3 Year Annualized Growth 5 Year Annualized Growth 10 Year Annualized Growth 20 Year Annualized Growth Years Of Consecutive Dividend Growth 6.25% 10.96% 13.06% 78.95% 283.87% 33 Trading Ideas. He tries to invest in good souls. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. When it comes to investing in Exxon and Chevron today, there are legitimate concerns about their abilities to keep paying the dividends supporting their 7.5% and 5.5% yields, respectively. ... Chevron Will Not Cut Its Dividend… Over the last 10 years, the dividend has climbed to $4.76. That's typical of European energy companies. Chevron has grown its dividend for 27 consecutive years. That last point is important here, because the top and bottom lines at Exxon and Chevron are clearly driven by the price of oil. This is a cyclical business, so history suggests that prices will, eventually, turn higher again. Clearly, paying a consistent and growing dividend is important to the boards of these to integrated energy giants. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC 2018 and/or its affiliates. Find Stock Information for Chevron (CVX). Shell and Equinor are two direct competitors that have taken this drastic step to ensure they have ample cash to survive. Chevron Corporation (CVX) will begin trading ex-dividend on November 17, 2020. "Big Oils enter this downturn stronger and more resilient," the Goldman Sachs analysts wrote in the report to clients. In fact, they have to support their dividends in other ways, since neither is earning enough to cover its dividend right now. Returns as of 12/07/2020. However, that would likely mean that there's been a structural change in global energy demand. In many ways, that's exactly what Russia and Vladimir Putin wanted when they refused earlier this month to cut production despite the coronavirus shock.