Is It Too Late to Buy Chevron Stock?

If you had to pick an energy stock to buy right now, (NYSE: CVX) has a lot of positives going for it. But at the end of the day, the real driver of the company's financial results and stock performance is going to be the price of oil and natural gas. That's a complication that investors need to understand before buying this (or any) energy stock. Still, there are reasons to like Chevron versus its peers right now, as well as reasons why you wouldn't want to buy it. Here's what you need to know to make the final call.

If you were to pit two integrated energy majors in a head-to-head fight, the most obvious  would probably be between Chevron and fellow U.S. energy company ExxonMobil (NYSE: XOM). They are both integrated, they are both U.S. based, and they are both largely sticking with their oil and natural gas focuses (European peers have been more aggressive in adding clean energy to the mix).

So how do these two stack up? Using dividend yield as a rough proxy for valuation, Chevron's 4.2% yield is far more attractive than Exxon's 3.3%. That's a pretty big difference on a percentage basis. Historically speaking, both stocks have had higher yields during oil downturns, but Exxon's yield is particularly low today, as the chart below shows. That makes Chevron a better income play, of course, but also suggests that it is the more attractive of the two stocks in terms of valuation.

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Source Fool.com