3 Reasons to Buy Chevron, and 1 Reason to Sell
When it comes to the energy sector, a few names stand above the rest, and Chevron (NYSE: CVX) is one of them. With a massive $285-billion market cap, it is easily one of the largest oil and natural gas producers on the planet. And it has a long history of operational success and dividend growth. It's a great energy option, but only if you are thinking long-term. Here are three reasons you might want to buy it and one reason to avoid it.
Although oil and natural gas prices are the biggest driving force behind Chevron's top and bottom lines, its business is spread across the energy landscape. That includes everything from upstream drilling operations to downstream chemical and refining businesses. It provides a bit of balance to results, often softening the blow when energy prices drop. This is notable because commodity prices are volatile and often move in a dramatic fashion. Having an offset, even if modest, helps smooth out performance over time.
Another notable facet of Chevron's business is that management has long focused on having a rock-solid balance sheet. To put a number on that, the oil giant's debt-to-equity ratio is around 0.2 times today. That's lower than all of its closest peers.
Source Fool.com
