This Is How Many Shares Of Chevron You Have To Possess To Receive $ 10,000 In Annual Dividends

You would have to invest a substantial amount in Chevron shares to enjoy an annual dividend income of $ 10,000.
Chevron seems to be in a great position to expand his line of 38 consecutive annual dividend rises.
The oil and gas giant must also continue to reward investors with share purchasing.

Investors looking for passive income have many alternatives. One of the best strategies is to buy shares that offer attractive dividends. Chevron (NYSE: CVX) stands out as a good example. If you invest in this oil and gas giant, you must be able to lean back and see the dividend payments flow regularly.

Oil installations. — Image source: Getty images.

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The more money you can put to work, the more income you earn. How many Chevron shares should you possess to receive $ 10,000 in annual dividends?

Fortunately we don't have to be mathematical geniuses to perform the calculation. The mathematics to determine how many Chevron shares you need to earn $ 10,000 from annual dividend income is simple.

Chevron currently pays a quarterly dividend of $ 1.71 per share. Multiplication of $ 1.71 times four quarters gives us a total of $ 6.84 in dividends in the coming year.

Now that we have made the necessary multiplication, we must do a division. Distributing $ 10,000 by $ 6.84 to annual dividends per share is equal to around 1,462 shares. Against Chevron's current share price of approximately $ 136.26 (from the market on 1 May 2025), this translates into an initial investment of $ 199,212.

That is a substantial amount to invest in one share. Because it is important to have a diversified portfolio, you probably only want to consider such a large investment in Chevron if your portfolio size is far in the millions of dollars.

The good news is that, regardless of how much you are investing in Chevron, your annual dividend income will probably grow considerably over time. In January 2025, Chevron announced an increase of 5% in his dividend payment. That marked the 38th consecutive annual dividend increase from the company.

Can Chevron maintain that impressive line? I think so.

An important metric investors look at the assets of a company to increase its dividend in the future is the dividend payment. This ratio is calculated by sharing the total dividends per share that are paid by profit per share.

Chevron's payment ratio is approximately 67%. This reflects the flexibility for the oil and gas producer to continue to pay the dividend at the current level and to increase it moderately without experiencing financial problems.

However, the payment ratio does not always tell the full story. Free cash flow is demonstrably an even better financial statistics to consider. Chevron generated a free cash flow of $ 15.3 billion in 2024. The company paid dividends of $ 11.8 billion last year. This shows that Chevron could easily use more of his free cash flow to finance the dividend program if it chooses to do this.

Even better, Chevron is planning to increase his free cash flow by $ 10 billion by 2026. The company stimulates production and lowers the costs, an ideal combination for the growing free cash flow.

Chevron will probably also reward investors in other ways. The company purchased $ 15.2 billion of its outstanding shares in 2024. It is planning to “purchase shares”, with a targeted annual share buy between $ 10 billion and $ 20 billion a year. Representing this share purchasing what some people call an “invisible dividend” by reducing the number of outstanding shares, which increases the value of remaining shares.

Although the shares of Chevron have not performed properly in the last 12 months, it could return to achieving solid profit for investors. As mentioned, the company increases its production. It also invests in renewable energy and carbon captures that can pay beautifully in the long term.

Consider this: Before buying shares in Chevron:

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Keith Speights has positions in Chevron. The Motley Fool has positions and recommends Chevron. The Motley Fool has a disclosure policy.

This is how many Chevron shares you have to possess to receive $ 10,000 in annual dividends, was originally published by the Motley Fool

This is how many shares of Chevron you have to possess to receive $ 10,000 in annual dividends