For investors who follow the Dogs of the Dow strategy, one of the top picks for investors looking for value is Chevron Corporation (NYSE:CVX).
The Dogs of the Dow strategy is one which looks specifically at the companies in the Dow which have the highest dividend yields, assuming that the short-term downward fluctuation in the Dogs’ stock prices which have led to the higher-than average yield will result in a reversion toward a longer-term mean, with investors able to pick up the excess yield these companies provide in the near to medium-term to compensate for the excess risk which has been priced into the Dog’s share price.
Chevron is a company which has been hit particularly hard of late by pessimistic market sentiment relating to the price of oil, acting as somewhat of a proxy for the oil & gas industry globally, despite recent strategic moves the company has made which increase its attractiveness compared with the vast majority of oil & gas firms available on equity markets today.
The most important (and perhaps under covered) strategy which should bode well for Chevron in the long-term is the company’s shift in strategic focus toward the Permian basin, with a plant to continue to increase its shale fracking rig count from 12 today to 20 by 2018.
This strategy will simply allow Chevron to take advantage of the technological advancements in the oil & gas sector which have allowed other shale fracking outfits to return profits in this low-commodity price environment, relative to traditional producers with much higher input costs.
Invest wisely, my friends.
