There’s still a place for oil in your portfolio

Article Excerpt

Despite the double shock of COVID-19 and the Saudi Arabia-Russia oil price war, investors should keep some exposure to the oil industry. Still, we prefer integrated firms like Chevron over riskier producers like Apache. CHEVRON CORP. $94 remains a buy for the Resources sector of your portfolio. The company (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.9 billion; Market cap: $178.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 5.5%; TSINetwork Rating: Average; is the second-largest integrated oil producer in the U.S. by revenue after ExxonMobil (New York symbol XOM). In response to lower crude prices, Chevron has suspended share buybacks and cut its 2020 exploration costs and other capital spending by 20%, or $4 billion, to $16 billion. In addition, by the end of the year, the company expects to reduce its annual costs by $1 billion. In the quarter ended March 31, 2020, Chevron produced 3.26 million barrels a day. That’s up 6.5% from 3.04 million barrels a year earlier. However,…

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