3 Stocks Bringing Dividends Over 5 % -Part 1- Chevron (NYSE: CVX)

  Part 1- Chevron (NYSE: CVX) 3 Stocks Bringing Dividends Over 5 % -Part 1- Chevron (NYSE: CVX) These companies are likely to sustain their high returns over the long term. Investors often turned to dividend stocks in order to gain profits in the face of low interest yields of banks. While the average dividend yield is 1,5 % for the S&P 500, some stocks offer cash returns of over 5 %. We can list the shares that have high potential and pay more than 5 % as follows: -Chevron (NYSE: CVX) - Lumen Technologies (NYSE: LUMN) - Omega Healthcare Advisors (NYSE: OHI)

1-Chevron

The company that produces, processes and sells oil and natural gas has become one of the largest energy companies in the world. Chevron gained a huge advantage over ExxonMobil (NYSE: XOM) during the pandemic. The total debt of ExxonMobil and Chevron, whose revenues have fallen due to the recent decline in oil demand, increased by $ 21 billion and $ 17 billion, respectively. Exxon increased debt and reduced capital expenditures to raise cash when needed to reverse production drops. It bought Noble Energy and took on its $ 9,4 billion in debt. This led to a partial increase in Chevron's debt. This acquisition is expected to increase the company's free flow and increase earnings per share in the coming years. In this way, the company's debt will be amortized in the long run. In addition, Chevron increases its dividend, generating an annual return of about 5 % with an annual payment of $ 5.16 per share. The oil giant generated $ 1,7 billion of free cash flow in 2020. Despite increasing debt, the debt ratio remains at 23 %, a level at which the company can maintain balance sheet stability. The fact that interest and debt expenditures in 2020 were lower than their 2019 level shows that an increase in Chevron's debt does not directly threaten the dividend. Given these circumstances, it's understandable why Warren Buffett bought a new stake in Chevron.  

Source: The Motley Fool

 

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