Quarter: Third-quarter net income declined 1.7% to $3.8 billion. Earnings per share fell 2.6% to $1.87. Revenue increased 7.6% to $46 billion. The gross margin extended from 21% to 23% and the operating margin expanded from 11% to 12%. Chevron held nearly $15 billion of cash and equivalents and $11 billion of debt at the end of the quarter, equaling a quick ratio of 1.2 and a debt-to-equity ratio of 0.1. Crude oil currently costs nearly $89 a barrel.
Valuation: Chevron's stock trades at a forward earnings multiple of 8.5, a book value multiple of 1.6, a sales multiple of 0.9 and a cash flow multiple of 5.5, 58%, 59%, 71% and 34% discounts to oil and gas peer averages. Its PEG ratio of 0.1 reflects a 90% discount to estimated long-term fair value. Chevron's trailing earnings multiple of 9.9 represents a 46% discount to the peer average, but a modest premium to the company's five-year average multiple.Dividend: Chevron pays a quarterly dividend of 72 cents, translating to a yield of 3.4%, higher than the 10-year Treasury yield, and a payout ratio of 34%. Chevron has a record of distribution increases.
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