CVX • Energy • Integrated Oil & Gas

Chevron Corporation

Last closing price

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Valuations

Peter Lynch Fair Value
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Price/Earnings to Growth
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Price/Earnings to Growth & Dividend Yield
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Methodology

Chevron's integrated oil and gas model provides more earnings stability than pure E&P companies, but profits still swing dramatically with crude oil and natural gas prices. Downstream refining partially hedges upstream production, though correlation remains high. Fair value calculations work best using mid-cycle oil prices ($65-75 WTI) rather than spot market assumptions.

Methodology

Chevron typically trades at low PEG ratios (0.3-1.0x) that reflect commodity cyclicality and energy sector skepticism rather than true valuation cheapness. Production growth remains modest as capital discipline prioritizes cash returns. PEG misleads for integrated oils because earnings growth reflects oil price changes more than operational improvements or production increases.

Methodology

Chevron pays a substantial dividend yielding 3-4% with aristocrat status, plus significant share buybacks totaling 6-10% annual shareholder returns. The company's fortress balance sheet supports dividend sustainability through commodity downturns. Total shareholder yield often exceeds 8-10%, making yield-adjusted metrics far more relevant than growth-based valuations for this mature energy major.

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