What is the Anticipated Dividend Amount Chevron Will Disburse in 2025?
Energy titan Chevron (CVX, up 1.29%) enjoys popularity among income-focused investors due to its enticing dividend yield of 4.2%, a 37-year streak of annual dividend increases, and its profitable business model that promises to provide substantial passive income in the near future. Here's what shareholders might expect in terms of dividends by 2025.
Chevron might boost its dividend
At present, Chevron pays out a quarterly dividend of $1.63 per share, totaling an annual payout of $6.52. Given the company's track record and current market conditions, there's a reasonable chance that its dividend will escalate in 2025 as well.
However, predicting oil prices can be challenging (and Chevron's profits, like many within the energy sector, are heavily influenced by oil prices), it's suggested that the price of oil needs to hover around $60 per barrel (Brent spot price) for Chevron to successfully expand its upstream earnings per barrel.
Additionally, Chevron consistently generates an impressive amount of free cash flow (FCF) per share, which consistently surpasses its dividend payments per share.
Furthermore, assuming oil prices remain stable throughout 2025, Chevron's FCF is expected to significantly increase compared to 2024. This is partially due to management's decision to reduce capital spending by around $2 billion in 2025, lowering it to between $14.5 billion and $15.5 billion.
Reducing capital spending is likely to boost FCF, and analysts on Wall Street are forecasting that Chevron will produce $21.1 billion in FCF in 2025, up from $16.3 billion in 2023. Under standard circumstances, it seems probable that Chevron will enhance its $1.63 per share quarterly dividend in 2025.
Investors who are interested in finance and money might find Chevron's potential dividend boost appealing. Given its consistent free cash flow generation and conservative approach to capital spending, Chevron appears poised to increase its dividend payout in 2025, potentially providing a good return on investing in energy stocks.
With reductions in capital spending and stable oil prices, the company is anticipated to have a significant boost in free cash flow in 2025, making it more likely for Chevron to consider an increase in its dividend investment, thus further attracting income-focused investors.
