This should also make BHP stock more stable.
At present, the beta for BHP is 1.60. Exxon is 0.86. Chevron is 1.09. Stability such as that increases the appeal of a stock as it evinces there are long term investors who are committed to holding their shares. A major factor for the long term appeal of Big Oil stocks is a big dividend: BHP certainly has that with a yield of 3.35%, topping Exxon's 2.81% .
BHP now produces about 670,000 barrels of oil equivalent daily.
It is seeking to double its oil production just in the Eagle Ford in Texas alone. This is a very attractive transformation in BHP, even though it has a long way to go before it comes close to an ExxonMobil or a Chevron in output. As its oil production increases, though, so will the long term value of BPH for investors.At the time of publication the author held no positions in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff. READ MORE: 10 Stocks Carl Icahn Loves in 2014 TheStreet Ratings team rates CHEVRON CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHEVRON CORP (CVX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CVX's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 0.5%. 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 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- 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 5.6% when compared to the same quarter one year prior, going from $5,365.00 million to $5,665.00 million.
- In its most recent trading session, CVX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- You can view the full analysis from the report here: CVX Ratings Report