Chevron Corporation operates in two areas: downstream and upstream. The first type of activity involves the processing of raw materials, and the second – its exploration and production. Upstream is highly dependent on the current oil prices. This area of the company is currently experiencing not the best of times due to a decrease in the cost of raw materials.
In 2015, Chevron Corporation’s oil operations lost about USD 1.9 billion. At the same time, losses were offset by income from the processing of raw materials. Chevron Corporation is a market giant that has survived many crises and has demonstrated its “vitality” and reliability.
The company has support from the US government. Energy generation is part of the US national interest. This gives the company a powerful competitive advantage. The support of the most powerful government in the world significantly strengthens the position of Chevron Corporation.
The company is characterized by the lowest level of resource extraction costs. The corporation is the largest in the world, and one of the most technologically advanced in the industry. The company invests in many oil fields.
Chevron Corporation is also actively collaborating with other corporations in the oil industry. In joint projects, profit is distributed proportionally among all participants. This approach allows the company to share risks, increasing its economic potential.
The corporation has everything necessary for the implementation of the most ambitious projects in the field of extraction and processing of energy resources. The last severe drop in oil prices occurred in 2009. This was reflected in the number of dividends received by the company’s shareholders. If in 2008, holders of securities received USD 11.67 per share, then in 2009 this figure dropped to USD 5.24. At the same time, in 2011, dividends amounted to USD 13.44.
When evaluating the prospects of Chevron Corporation, one must consider that this company is an “aristocrat” of the industry. Its profitability is highly dependent on cycles in the oil and gas industry. Moreover, in times of crisis, the corporation acts very competently, effectively stabilizing its position. This mechanism is well-honed. The company has a long history and has survived more than one crisis. It is safe to say that Chevron is one of the most reliable and stable corporations in the world.
To make money on Chevron’s shares, you need to apply both technical and fundamental analysis. The main factor affecting the value of Chevron Corporation assets is the price of oil. When quotes of these raw materials rise, the company’s shares also strengthen their position. If oil prices fall, Chevron securities lose less than the assets of competing enterprises.
Also, do not forget about the rules of money management. You should not risk in one transaction the amount that exceeds 5% of your deposit. Otherwise, during the revival of volatility in the market, you can lose significant funds if your forecast turns out to be incorrect.