An $18 billion reason to own this 147-year-old dividend stock

Most investors chase the next hot stock. They want the big pop, the explosive earnings beat, or the name everyone's talking about at dinner.

But the investors who actually build lasting wealth? They tend to think differently.

They look for companies that show up every year and quietly put money back in their pockets.

These are companies with decades of proof behind them, not just a few good quarters.

Vanguard's Sharon Hill, who manages the firm's Equity Income Fund, puts it plainly: "Whether an investor needs income and/or simply values the attributes of higher-dividend-paying companies, an active fund that seeks high-quality companies with stable dividend yields may be suitable."

That kind of thinking points directly to Chevron, a Dividend Aristocrat founded in 1879 that has spent nearly 150 years building the sort of business that income investors dream about.

Chevron is a top dividend stock

Chevron (CVX) is one of the world's largest integrated energy companies. It finds oil and gas in the ground, moves it across the globe, and refines it into the fuel that powers your car and the chemicals in everyday products. 

It operates on every continent and across every stage of the energy value chain.

This massive scale gives Chevron pricing power, geographic diversification, and the kind of financial firepower most companies can only wish for.

Chevron has now increased its dividend for 39 consecutive years, placing it firmly among the elite group known as Dividend Aristocrats, of which there are currently only 69 members trading on U.S. exchanges.

In 2025, the energy behemoth delivered on that promise again with record production and record U.S. output.

And for the fourth year running, it returned record cash to shareholders. CEO Mike Wirth said it plainly on the company's Q4 earnings call:

"We're entering 2026 from a position of strength and will continue building on our momentum in the years ahead."

$18 billion in capex sets the stage for more dividend hikes

Here's what makes Chevron interesting right now: the company isn't slowing down. Chevron is expected to invest roughly $18.4 billion in capital expenditures in 2026.

That money is going into high-return projects: offshore platforms in Guyana and the Gulf of America, natural gas expansions in the Eastern Mediterranean, and continued development at its massive Tengiz operation in Kazakhstan.

Related: Chevron stock sends loud message as oil panic grips Wall Street

CFO Eimear Bonner told analysts the company anticipates production growth of 7-10% year-over-year, driven by project ramp-ups and a full year of assets from its Hess acquisition. That kind of volume growth is what supports a rising dividend over time.

And the growth isn't just coming from production.

• Chevron's structural cost-cutting program delivered $1.5 billion in savings in 2025. 
• The company now aims for $3 billion to $4 billion in total savings by year-end 2026, with over 60% expected to stick around as permanent efficiency gains.

Put it together: more production, lower costs, and a $18 billion investment program — all pointed in the same direction.

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Chevron's board declared a 4% increase in the quarterly dividend to $1.78 per share in early 2026, positioning the company to raise its annual dividend payout for the 39th consecutive year.

Key Chevron stock dividend ratios:

Here's a summary of the most important dividend metrics for CVX:

• Annual dividend per share: $7.12
• Quarterly dividend per share: $1.78
• Dividend yield: ~3.8% 
• 10-year dividend growth rate: ~5.6% annually
• Consecutive years of dividend increases: 39 (Dividend Aristocrat)
• Dividend frequency: Quarterly

Chevron's dividend expense is around $13 billion while its free cash flow is projected over $28 billion this year, indicating a sustainable payout ratio of below 50%.

Wall Street still likes what it sees

Among the 22 analysts currently covering Chevron stock, 17 recommend "buy" and five recommend "hold".

Wall Street has an average 12-month price target of $209 for CVX stock, indicating an upside potential of over 10%.

Notably, Ryan Todd at Piper Sandler, has a stock price target of $242 for CVX, almost 27% higher than the current price.

That optimism is grounded in fundamentals. Chevron's breakeven, the oil price it needs to cover its dividend and capital spending, is below $50 per barrel of Brent.

In a world where Brent crude has been trading well above that level, Chevron generates significant excess cash.

In 2025, Chevron returned$27.1 billion to shareholders, including $12.1 billion in share repurchases, $12.8 billion in dividends, and $2.2 billion in early Hess share purchases.

The bigger picture for income investors

It's easy to get distracted by volatility — oil prices swinging on Middle East headlines, tariff fears rattling equity markets, recession talk cycling back into the conversation.

In times like these, Chevron's track record is worth remembering. The company has navigated oil busts, financial crises, and global pandemics without cutting its dividend. 

That consistency is rare. And in a market where investors often sacrifice income for growth, a dividend stock that does both — pays and grows — is exactly the kind of holding that anchors a portfolio.

Related: 147-year-energy behemoth expected to raise dividends as oil surges past $90