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Chevron ETFs to Buy on Buyback & 6% Dividend Hike
Energy behemoth Chevron (CVX - Free Report) announced a $75 billion stock buyback program and a dividend hike on Jan 25. Shares of Chevron gained more than 2% in extended trading. The buyback program will be effective on April 1.
The dividend hike increases Chevron’s per share payout to $1.51 from $1.42, and that will be distributed on March 10. The hike marks a 6.33% gain. The dividend yield of Oil and Gas - Integrated - International industry is 3.14% versus the S&P 500’s dividend yield 1.63%.
The latest dividend yield marks 3.37% of annual yield as of Jan 25, 2023. This buyback plan followed a $25 billion plan enacted in 2019. The previous plan will be ended at the end of March 2023. For the third quarter of 2022 — the most recent quarter that Chevron has reported — the company bought back $3.75 billion of shares.
The new plan for shareholder value maximization came on the heels of an energy market rally. The coronavirus vaccine rollout is gradually helping to control the spread of the outbreak across the globe. Factors like easing Omicron concerns, supply shortages, and geopolitical tensions in Eastern Europe and the Middle East have also boosted oil prices last year. Shares of Chevron rose more than 35% past year despite the broader market slump.
Chevron has a Zacks Rank #3 (Hold). The stock has a VGM (value-growth-momentum) score of A. Against this backdrop, below we highlight a few ETFs that are heavy on Chevron and can be played on Chevron’s dividend hike announcement. We also highlight the weights Chevron takes in each fund.
ETFs in Focus
Energy Select Sector SPDR Fund (XLE - Free Report) – Chevron takes 19.48% of the fund
Strive U.S. Energy ETF (DRLL - Free Report) – Weight 16.50%
iShares U.S. Energy ETF (IYE - Free Report) – Weight 16.48%
Vanguard Energy ETF (VDE - Free Report) – Weight 16.06%
Fidelity MSCI Energy Index ETF (FENY - Free Report) – Weight 15.64%
iShares MSCI Global Energy Producers ETF (FILL - Free Report) – Weight 11.63%