Chevron Returns $75 Billion To Shareholders As White House Fumes

Chevron (CVX) will launch a massive $75 billion share buyback and raise its dividend, the Dow Jones energy giant announced late Wednesday. The news comes ahead of fourth-quarter earnings due on Friday. Chevron stock advanced early Thursday.

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The $75 billion stock buyback represents 20% of shares outstanding, at current price levels. Chevron also boosted its quarterly dividend by 6%, to $1.51 a share. The $75 billion buyback program will begin on April 1, 2023, and does not have a fixed expiration date. Chevron’s previous stock buyback program of $25 billion began on Jan. 2019 and will end on March 31, 2023.

In 2022, the U.S economy reopened from the Covid pandemic Russia invaded Ukraine, sending oil and gas prices soaring. This resulted in Chevron, Exxon Mobil (XOM) and other energy stocks leading the market, with the companies posting record profits.

Chevron stock rose more than 50% in 2022 even as the broader stock market declined.

Throughout 2022, President Joe Biden criticized Exxon Mobil, Chevron and several other large producers for choosing to focus on returning money to shareholders instead of spending to increase production.

“For a company that claimed not too long ago that it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders sure is an odd way to show it,” White House Assistant Press Secretary Abdullah Hasan tweeted Wednesday.

Chevron stock rose 2.6% Thursday in market trade. On Wednesday, CVX shares closed down 1% to 179.08. The stock is resting on support at its 10-week moving average, below a 189.78 buy point from a shallow cup base. Aggressive investors could use Monday’s high of 182.55 as an early entry.

Chevron Stock: Earnings

Estimates: Wall Street predicts EPS growing 69% to $4.33. Analysts view sales increasing 9% to $52.68 billion.

Earnings: Check early Friday.

Over the last three quarters, Chevron has averaged 200% earnings growth compared to the previous year.  In Q3, Chevron topped earnings estimates, reporting EPS surging 88% to $5.56 per share. Sales increased 59% to $66.6 billion in the third quarter.

In late November the White House eased oil sanctions on Venezuela. The Biden administration, following a human rights agreement signed between President Nicolaus Maduro’s administration and opposition negotiators, said it would allow Chevron to resume oil production in the Latin American nation. Chevron can produce oil for six months and can only export it to the U.S. under the license agreement.

Reuters reported Wednesday that Chevron’s fifth and sixth cargo of heavy Venezuela crude are expected in the U.S. soon.

Chevron stock ranks 11th in the Oil & Gas-Integrated industry group. CVX shares have an 91 Composite Rating out of 99. The stock has an 84 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The EPS rating is 78.

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