Chevron (CVX) Nears 52-Week Peak: Cramer Advises Holding Despite Insider Sales

Key Takeaways

Table of Contents

Jim Cramer advocates maintaining CVX positions, highlighting its 3.85% dividend yield and reliable performance
Latest quarter showed EPS of $1.52, surpassing projections by $0.08, despite a 10.2% year-over-year revenue decline
Company increased quarterly dividend to $1.78 per share, totaling $7.12 annually (approximately 3.8% yield)
Institutional investors boosted their holdings; institutions now control 72.42% of shares
Company executives divested $89.5M in stock during recent quarter; Wall Street consensus remains “Hold” at $176.36 target

Chevron (CVX) has captured significant market attention as shares advanced 1.3% to $186.47 during Friday’s opening session — approaching its 52-week peak of $187.90.

Chevron Corporation, CVX

During a recent broadcast, Jim Cramer responded to an investor inquiry by recommending shareholders maintain their positions. “I think it can go up a lot,” Cramer remarked, emphasizing the company’s dividend yield and what he characterized as Chevron’s “consistency.”

Cramer additionally mentioned potential gains from Chevron’s Venezuelan operations, calling them a potential “kicker” for future performance.

Quarterly Payout Increases

Chevron recently announced an increase to its quarterly distribution from $1.71 to $1.78 per share. This translates to an annual payout of $7.12 — delivering approximately 3.8% yield. The distribution is scheduled for March 10 to shareholders registered by February 17.

The company’s payout ratio currently stands at 106.91%, indicating Chevron is distributing more than current earnings support — a metric warranting investor attention.

Latest Quarterly Results Show Mixed Performance

Chevron’s January 30 earnings release revealed EPS of $1.52, exceeding the Street’s $1.44 estimate. Revenue, however, totaled $45.79 billion, falling short of the anticipated $48.18 billion and representing a 10.2% year-over-year decline.

The company reported a net margin of 6.51% alongside a 7.89% return on equity. Wall Street projects full-year EPS of $10.79.

The year-over-year EPS comparison shows notable deterioration — the company delivered $2.06 per share during the comparable period last year.

Institutional Activity Accelerates

Numerous institutional players expanded their CVX holdings during Q3. Trivium Point Advisory LLC increased its position by 73.9%, acquiring an additional 6,855 shares for a total of 16,131 valued at approximately $2.5 million.

American Century Companies led institutional buying, adding 810,086 shares — representing a 45.6% increase — elevating its total position to 2,586,278 shares worth roughly $401.6 million.

Berkshire Hathaway similarly expanded its Chevron stake following Warren Buffett’s departure from active firm leadership.

Institutional ownership has reached 72.42% of outstanding shares.

Insider Selling Activity Intensifies

Contrasting with institutional accumulation, company insiders have been reducing positions. During the previous quarter, insiders sold 534,898 shares totaling $89.5 million.

Vice Chairman Mark A. Nelson divested 45,800 shares on February 2 at $174.17 average price, cutting his holdings by 86.48%. Another insider, Andrew Benjamin Walz, sold 1,463 shares on February 18 at $183.83.

Insider ownership currently represents merely 0.21% of the company.

Wall Street’s Current Perspective

Analyst viewpoints span a range of outlooks. UBS maintains a buy recommendation with a $212 price objective. BMO Capital Markets confirmed its outperform rating at $190. JPMorgan recently upgraded CVX from neutral to overweight, establishing a $176 target.

Conversely, one DCF-based valuation analysis suggested CVX trades approximately 30% above fair value, estimating intrinsic value around $126.

The aggregate view from 24 analysts points to “Hold” with a mean price objective of $176.36 — notably below current trading levels.

CVX’s 50-day moving average rests at $169.52 while its 200-day average stands at $159.57. The company maintains a market capitalization of $372 billion, a PE multiple of 28, and a beta coefficient of 0.70.