Chevron has set a capital budget of $14 billion for 2021 and says it is focused on higher returns. I said in March that Chevron was liquidating itself. A month later I worried about its dividend. The dividend worries are gone for the short term. The Noble deal extends the life of Chevron’s most profitable fields. Chevron still has positive free cash flow. If global oil prices firm next year that dividend still looks safe.
The question is how long that can continue. Chevron is whistling past the carbon graveyard, electric vehicle use is increasing, and nation states are taking more control over their markets. Income investors can buy Chevron for 2021 but need to pay close attention. If that dividend comes under renewed threat, get out.
Source: InvestorPlace
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