In short term, CVX stock price will take a hit but will come back when oil price will improve. It is wise to reduce debt rather than to pay a hefty dividend. Nobody can predict when the oil will be trading at $55 per barrel. In the meantime, the debt will keep adding if a quick decision is not taken to suspend the dividend. Let us not collapse under the weight of the debt.
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4ijm: some reason in the storm. The only reason for Chevron to cut a dividend payment would be if it were the only way to complete a major investment transaction (take over Exxon, go all in on offshore Brazil, or something similar). Otherwise there is not a chance! Chevron has the resources to barrow dividend payments for a few years and companies that prove they can sail straight in a storm will command a premium during the next boom cycle.
Chevron has plenty of liquidity - no reason to cut the dividend.
Shell just cut the heck out of their dividend for the first time since WWII. Dividend cut from $0.47 to $0.16. Tomorrow could be interesting.
Yes @3mif we are in agreement. The point is not to confuse one's assets with one's priorities. Assets are resources to be employed toward reaching one's objectives. Priorities indicate the true aim of one's objectives. Corporations aim to make money for the owners of the company. I am also only an employee, but I happen to understand the nature of the entity I serve and which for several years has rewarded me for doing so quite agreeably. Though I strive to be a useful contributor to the goals of the corporation, I am quite certain that I am expendable. We are all in the same boat, however others of higher position than I man the rudder. Its a fact that I choose to accept and to these circumstances I give my faith that if tossed overboard I will do my best to swim for shore. There are no solemn promises made in modern employment, nor in the eye of the storm while at sea, best we focus on rowing, lest we hasten our departure to the deep.
You are right, @3dgb. The executives do make the decisions and they have told everyone what they are going to do.—- They will save the dividend over saving many employee’s jobs. Get ready for massive layoffs. You’ll be demonstrated firsthand what truly is Chevron’s Number 1 asset.
Many of these opinions are valid but they matter very little. The executives make the decisions and they have told you what they are going to do. Capital preservation and sustaining the dividend are the top two priorities. Armchair quarterbacks don’t throw touchdown passes.
Choose: work for a debt free Company and you feel security of the job everyday or work for a debt laden Company and you feel insecure everyday. Your supervisor will rule as if you are slave. Hence, use the dividend for CAPEX/OPEX.
@2qht, then inevitably you know what that means. Layoffs are coming and heads will roll. Not theirs, but yours. Anything to pay the damn dividend. What good is that when you are out on the street? Stop supporting the drivel these executives say. They don’t care about you or any expendable employee. They’ll roll you and your family under a bus in a second. Their jobs are secured and they know it. The dividend must be cut now.
MW clearly stated in the security analyst meeting that the top priority was to return capital to shareholders.
JJ in yesterday’s post on workplace once again stated that maintaining the dividend and capital discipline are each a top priority.
The decision has been made I suppose they forgot to consult with you. Damn the bad luck.
@1eij, who did you "preach" to, your middle school choir? I'm sure they got a kick out of your incessant whining, lol.
Maintaining the dividend is not a must. It’s an OPTION to keep, pause increases, diminish, or do away with it altogether. I favor pausing the periodic increases and see if the stock recovers. If it doesn’t recover, then cut the dividend by 25%. The CEO should make a bold decision and carry it out.
Chevron is a well managed company and its balance sheet is strong. Maintaining the dividend is a must.
Buybacks should be outlawed. The trillions companies spent in buybacks could have should be used to strengthen the balance sheet for a day like this. Such short sightedness. Chevron needs to cut all capital in the permian, sjv, halt the new Mexico deepwater project, etc. Don't pretend we are to big and ‘capital disciplined’ to do otherwise. Also merge with another major if we need too.
Shareholders own the company. They eat first. Bank on it.
There is no point paying dividend when each barrel of oil has negative value.
You are all id–ts. Those holding chevron shares only want their dividend payment. They don’t give a c-ap about the price. They must and will be paid. Make no mistake. Management will cut all spending and borrow up to wild levels before sacrificing the dividend. It is the last thing to cut. Last.
No debt scenario will attract investors who will love capital appreciation rather than loosing 30% while banking on 5 % dividend. Most of the bankrupt companies had slashed dividend when they were on ventilators. We should not follow this strategy. As a part of transformation, we should review dividend strategy to keep the company afloat.
Correct, Nobody will invest in this environment. Cease the opportunity and the excuse to cut the dividend or announce it won’t be raised until further notice. Though the news may not be taken well by some investors now, it will be appreciated later. For many who were caught holding CVX stock as the value tumbled, they are going nowhere. They will retain their shares before taking a significant loss by selling it cheap. They won’t mind the a dividend cut or a pause to increases. What investors what most is profit and preservation of capital. The CEO and BOD should show leadership by making this move now. Cut the dividend, because Chevron’s future is more important than retaining a stupid title.
Investors also want to preserve and grow capital. Nobody will invest in this environment.
I’ve been preaching cutting or not increasing the dividend since 2015, but nooooo. Can’t do that, investors will flee, it will wreak the stock, we will break our aristocrat status, and on and on. Let me ask you again; How’s it working out for you now?
Good point. Huge debt combined with Macondo type situation can k–l any balanced sheet.
Boeing just slashed the dividend and is fighting for survival. The dividend is not for running the business. We may be in the Boeing's situation if oil price remains below $40 for a long period. Oxy is fighting for survival under the weight of huge debt. Uncalled debt is poison.
We have a strong balance sheet. Easy to borrow for a year or more before doing anything rash.
This is not the first it happens! CVX will borrow money, liquidate assets, fire the slaves, prostitute itself left and right, but will not dare upset its gods by touching the dividend.
The sad truth is this: companies (especially the public ones) are merely tools of capital growth for the masters through the sweat, tears, and blood of the peasants.
Navigate your way onto the Board of Directors and we will listen.