With a market capitalization of nearly $300 billion, Chevron (CVX) is one of the leading energy companies, according to CNN. Along with its larger main rival, ExxonMobil (XOM), American-based Chevron has been a solid investor for decades. But that’s not to say that if you had bought stocks 10 years ago, you wouldn’t have seriously thought about your choices along the way. There were some downturns.
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The good news is that these declines don’t last long, and stocks have always rebounded so far. The bad news is that even though Chevron recognizes that the future of the energy sector is likely to be greener than the past, and has made some moves into the alternative energy sector, the core of this giant It’s an oil and gas company.
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Does Chevron pay a dividend?
To do. In fact, it pays a significantly higher dividend than its biggest rival, ExxonMobil. As of early May, Chevron’s dividend yield was 4.04%, and Exxon Mobil’s dividend yield was 3.21%, according to the Nasdaq average as of early May. This dividend yield, if reinvested, will indeed increase over 10 years.
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How much is your $1,000 worth now?
So, if you bet $1,000 on Chevron on May 1, 2014, how smart would you look today? If you didn’t reinvest the dividends, your stock would be worth $1,674.07 today. If reinvested, you would have earned $1,948.27, or an annualized rate of return of 6.89%. It’s not a giant, life-changing fountain.
Still, it’s better than Chevron’s competitor ExxonMobil, which yields $1,754.73, or an annualized return of 5.78%, assuming dividends are reinvested. Neither company would have outperformed his S&P 500. Again assuming dividends are reinvested, over the same period his $1,000 should have turned him into $2,736.09. This works out to be a return on funds of 10.78% per annum.
Should I buy Chevron now?
Based strictly on the numbers above, you would be better off putting your money in an S&P 500 index fund, which is more diversified and probably safer. But others believe Chevron is well prepared for the next 12 months. For example, according to the majority of his 26 analysts compiled by CNN Business, Chevron was a “buy”, with none claiming a “sell”. Given Chevron’s solid history and impressive dividends, it’s hard to argue.
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This article originally appeared on GOBankingRates.com: How much is your $1,000 investment in Chevron stock from 10 years ago worth today?
