Chevron Already One-Ups Exxon On Dividend Hike Game (XOM, CVX)

Energy

Published: April 25, 2012 4:22 pm

Last Updated: April 27, 2020 6:46 pm

When we saw that Exxon Mobil Corporation announced a 21% hike to its dividend this morning, we figured it would still be a ways out before Chevron Corporation (NYSE: CVX) followed suit. The logic was rather simple. Chevron has only had two consecutive quarters of its $0.81 payout per quarter, even though its $0.78 per quarter dividend before was only paid for two quarters before it was hiked.

DJIA companies and large established companies generally raise dividend annually rather than two-times in a year. Apparently the rules are just not applicable. Chevron Corporation (NYSE: CVX) announced after the close that it was hiking its dividend up to $0.90 per share per quarter. The dividend is payable June 11, 2012 to holders record on May 18, 2012.

Today’s hike is by 11.1%, shy of the 21% jump by Exxon Mobil. What Chevron has going for it is that it was already ahead of the game on the dividend race. Chevron’s prior yield at the close was already about 3.2% against the adjusted-higher dividend yield of about 2.7% for Exxon Mobil Corporation (NYSE: XOM). Now Chevron’s adjusted dividend yield will be about 3.47%.

Chevron’s hike might not be as much on a relative basis as the Exxon dividend, but it still wants to maintain that it has a more attractive dividend. With its size being only half that of Exxon Mobil, maybe this is par for the course.

The oil giants might show over and over that high oil prices alone do not assure higher and higher profits. Still, higher oil prices are allowing for greater visibility and greater visibility allows for companies to pay higher and higher dividends as long as they know they do not need the capital for other purposes.

JON C. OGG

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