Two Oil Stocks for Decades of Passive Income: Chevron & TotalEnergies

 

POINT

  • The oil market is highly volatile and faces long-term risks from the shift toward cleaner energy.

  • Chevron (CVX): A stable U.S. oil company with strong financials and a long history of dividend growth.

  • TotalEnergies (TTE): A high-yield French oil company strategically investing in clean energy.

  • Both stocks are excellent choices for long-term passive income investors.

DETAILS

Chevron and TotalEnergies Are More Than Just Oil Companies

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The oil industry is generally divided into three segments: 1️⃣ Upstream: Oil and gas production, highly dependent on price fluctuations. 2️⃣ Midstream: Transportation of oil and gas through pipelines, less sensitive to price changes. 3️⃣ Downstream: Refining and chemical production, impacted by both input costs and product prices.

Chevron and TotalEnergies are integrated energy companies operating in all three sectors, reducing volatility and ensuring stable revenue streams.

FUTURE OUTLOOK

1) Chevron (CVX): A Dividend Powerhouse with Financial Strength

  • Dividend Yield: 4.1%, with a 37-year streak of consecutive increases.

  • Competitor Comparison: ExxonMobil has a 42-year streak but a lower yield of 3.6%.

  • Debt-to-Equity Ratio: Below 0.2, ensuring financial stability during downturns.

  • Long-term Growth Strategy: Focused on shareholder returns and consistent dividend growth.

2) TotalEnergies (TTE): Preparing for the Future of Clean Energy

  • Dividend Yield: 5.6%, higher than Chevron’s.

  • Clean Energy Investments: Renewables segment grew 17% in 2024, proving resilience even in weak oil markets.

  • Competitor Comparison: BP and Shell cut dividends during the pandemic, while TotalEnergies maintained its payout.

  • Risk Consideration: U.S. investors are subject to French withholding taxes on dividends, though partial refunds are possible.

CONCLUSION

The oil market remains volatile, but Chevron and TotalEnergies offer stable, high-yield dividends for long-term investors.

  • Chevron (CVX): Ideal for conservative investors seeking dividend stability.

  • TotalEnergies (TTE): A diversified energy company adapting to the future of clean energy.

Both companies are strong candidates for passive income investment, offering reliable returns and strategic positioning in the evolving energy market.

Sources: Bloomberg, Reuters, Yahoo Finance, Chevron & TotalEnergies Investor Relations

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