Chevron(NYSE: CVX) is the second-largest publicly listed oil and gas producer in the U.S. today in terms of market capitalization, right behind ExxonMobil. It was founded in 1879 but expanded its asset base rapidly in recent decades across upstream and downstream energy, as well as chemicals, and hugely fortified its financial standing.
Thanks to its financial flexibility and prudent capital allocation, Chevron is one of the top dividend-paying oil stocks today. Earlier this year, the company increased its dividend by 8% per share, marking its 37th consecutive year of dividend increases.
Chevron stock, however, just hit a 52-week low on plunging oil prices. Its dividends won't stop growing, though, and you could even earn $1,000 in annual dividend income from the stock if you buy some shares now.
Chevron's latest quarterly dividend of $1.63 per share amounts to an annualized dividend of $6.52 a share. That means at the stock's current trading price of around $139 apiece, you can earn an annual dividend income of $1,000 if you buy 154 shares, or invest roughly $21,400 in Chevron stock now.
You wouldn't want to miss this opportunity to buy, given the oil company's dividend history and growth prospects.
A no-brainer dividend stock to buy now
Chevron continues to invest in growth. Its Gulf of Mexico portfolio and assets in Kazakhstan are among two of its biggest expansion projects currently underway. Chevron expects these and other investments to boost its annual free cash flow (FCF) by an average rate of at least 10% through 2027 at a Brent crude oil price of $60 per barrel.
Even if oil prices plunge below $60 per barrel, Chevron still has a lot of room to grow its FCF and dividend per share. And if Chevron acquires Hess, as planned -- the deal has run into some hurdles lately -- its FCF could grow at an even faster clip. That should mean even bigger dividends for shareholders, making Chevron a top stock to buy now.
Should you invest $1,000 in Chevron right now?
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.
