This is the fourth installment in a series examining all 30 components of the DJIA. Today's article is on Chevron and Dupont.
Chevron (NYSE:CVX) – “Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream”. (Business Description from Yahoo Finance)
- CVX is selling at the bottom of its five-year valuation range based on P/E, P/B and P/CF.
- The stock yields 3.1%, has an AA rated balance sheet and has raised its dividend payout an average of 8% annually over the last five years.
- Chevron is selling at around 7.3 times this year’s expected EPS which is a 25% discount to its five year historical average.
- CVX is selling at less than 1 time sales and has profligate cash flow. Chevron market value is less than 6 times operating cash flow.
- The median analyst price target on CVX is $121. S&P has a price target of $128 on Chevron.
- A worldwide growth slowdown could continue to provide tailwinds to oil prices.
- Dupont provides a solid 3.5% dividend yield and has raised its dividend by a little over 2% a year over the last half decade.
- Dupont’s stock is hovering just over a price level it has bounced off several times in the last year (See Chart)
- Dupont has easily beat earnings estimates each of the past six quarters. Consensus estimates for 2011 and 2012 have risen in the last three months as well.
- DD’s projected five year PEG of 1.1 is 50% under its five-year average and it has an A rated balance sheet.
- The median analyst price target on DD is $62. S&P has a price target of $60 on Dupont.
- Lower than expected worldwide industrial growth
- Dupont is selling at the high end of its five-year valuation range based on Price to Sales
Disclosure: I am long CVX.