Chevron Corp. $81 - New York symbol CVX

CHEVRON CORP. $81 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.1 billion; Market cap: $170.1 billion; WSSF Rating: Above average) is the secondlargest oil company in the United States after ExxonMobil Corp. Internationally, it has operations in over 175 countries. Chevron hasn’t fully benefited from the recent rise in oil prices. Its refineries have had to pay more for crude oil, which has hurt profits at this division. Shutdowns for maintenance at some of its operations, as well as the partial nationalization of its assets in Venezuela, have also cut total output. As well, many countries have increased drilling and other taxes on foreign oil companies. In the three months ended September 30, 2007, earnings fell 23.6%, to $1.75 a share (total $3.7 billion) from $2.29 a share ($5.0 billion) a year earlier. However, revenue rose 1.8%, to $55.2 billion from $54.2 billion. Chevron’s production should expand in 2008, as new projects in Thailand, Nigeria and the Gulf of Mexico begin operations. Capacity at the company’s refineries will also rise after several outages in 2007. The stock has moved down from its peak of $95.50 in September 2007. But it is still attractive at 10.3 times its likely 2008 earnings of $7.85 a share, and at 6.6 times cash flow of $12.25 a share. The $2.32 dividend yields 2.9%. Chevron is a buy.