Monday, July 15, 2013

Analysis of Chevron



American oil and gas company


Company: Chevron


 
Business: An American oil and gas company that are divided into three parts: Exploration & Production (oil & gas), Manufacturing Products & Transportation (manufacturing, global trading, products, pipelines, lubricants, shipping & oronite) and Other businesses (chemicals, mining, power & technology)

Active: They are active in 36 countries on six continents so a global player.

P/E: 9.0




containing P/E and P/B values as well as dividend

The P/E of Chevron is fully acceptable with 9.0 however I find that the P/B is slightly too high with 1.7. Still the total in the end gives a clear buy signal according to Graham. The earnings to sales are very good with 11%, the best I have seen as of yet! The book to debt... like most of the American companies today are excellent and one could even claim that it is on the border of too much! Since the excellent revenue year of 2008 they have had a decreased yearly growth of -2.4% which could have been better. We still end up with motivated P/E of 8-10 which means that the company based on its growth is fairly priced on the stock market. They pay a dividend of 2.9% which is very high for an American company today and that represents only 26% of their earnings so there is a lot of space to increase the dividends.

Conclusion: A good company for buy, hold and collect dividends strategy. I have no objections towards buying this company already today.

No comments: