A strong performer from today's evening trading session is Chevron, whose shares rose 2.2% to $156.64 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Chevron's Valuation Is in Line With Its Sector Averages:
Chevron Corporation, through its subsidiaries, engages in the integrated energy and chemicals operations in the United States and internationally. The company belongs to the Energy sector, which has an average price to earnings (P/E) ratio of 14.36 and an average price to book (P/B) ratio of 2.1. In contrast, Chevron has a trailing 12 month P/E ratio of 14.4 and a P/B ratio of 1.8.
Chevron's PEG ratio is 2.57, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
Generally Positive Cash Flows but an Average Current Ratio:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $166,339 | $146,516 | $94,692 | $162,465 | $246,252 | $200,949 |
| Operating Margins | 12% | 4% | -8% | 13% | 20% | 15% |
| Net Margins | 9% | 2% | -6% | 10% | 14% | 11% |
| Net Income (M) | $14,824 | $2,924 | -$5,543 | $15,625 | $35,465 | $21,369 |
| Net Interest Expense (M) | $748 | $798 | $697 | $712 | $516 | $469 |
| Depreciation & Amort. (M) | $19,419 | $29,218 | $19,508 | $17,925 | $16,319 | $17,326 |
| Diluted Shares (M) | 1,914 | 1,895 | 1,870 | 1,920 | 1,940 | 1,880 |
| Earnings Per Share | $7.74 | $1.54 | -$2.96 | $8.14 | $18.28 | $11.36 |
| EPS Growth | n/a | -80.1% | -292.21% | 375.0% | 124.57% | -37.86% |
| Avg. Price | $96.55 | $99.89 | $77.09 | $96.37 | $147.4 | $156.64 |
| P/E Ratio | 12.36 | 64.45 | -26.04 | 11.82 | 8.03 | 13.73 |
| Free Cash Flow (M) | $16,826 | $13,198 | $1,655 | $21,131 | $37,628 | $19,780 |
| CAPEX (M) | $13,792 | $14,116 | $8,922 | $8,056 | $11,974 | $15,829 |
| EV / EBITDA | 5.36 | 6.36 | 15.06 | 5.54 | 4.5 | 6.73 |
| Total Debt (M) | $39,356 | $31,762 | $37,049 | $33,691 | $27,389 | $25,379 |
| Net Debt / EBITDA | 0.75 | 0.9 | 3.04 | 0.84 | 0.15 | 0.37 |
| Current Ratio | 1.25 | 1.07 | 1.18 | 1.26 | 1.47 | 1.27 |
Chevron benefits from strong operating margins with a positive growth rate, generally positive cash flows, and growing revenues and a flat capital expenditure trend. The company's financial statements show positive EPS growth and healthy leverage levels. Furthermore, Chevron has just enough current assets to cover current liabilities, as shown by its current ratio of 1.27.
