Chevron Corp Stock Buy Recommendation Reiterated (CVX)

NEW YORK (TheStreet) -- Chevron (NYSE:CVX) has been reiterated by TheStreet Ratings as a buy with a ratings score of A. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:

• The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income increased by 4.2% when compared to the same quarter one year prior, going from $6,211.00 million to $6,471.00 million.
• CVX's revenue growth trails the industry average of 11.9%. Since the same quarter one year prior, revenues slightly increased by 1.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
• CVX's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.22, which illustrates the ability to avoid short-term cash problems.
• After a year of stock price fluctuations, the net result is that CVX's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The company has a P/E ratio of 7.6, equal to the average energy industry P/E ratioand below the S&P 500 P/E ratio of 17.7. Chevron has a market cap of $204.09 billion and is part of the basic materials sector and energy industry. Shares are down 0.8% year to date as of the close of trading on Friday.

You can view the full Chevron Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

For more information on Chevron Corp click any of the following:

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• Chevron Corp Growth Rates

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