Energy companies are highly cyclical. Their profits expand during periods of economic expansion and contract swiftly during downturns. After reporting record profits in 2022, energy stocks saw a steep fall in valuations last year due to macro headwinds combined with a worldwide shift towards clean energy. However, several energy stocks now have elevated dividend yields. For instance, Chevron (NYSE:CVX) stock currently trades 21% below all-time highs and offers shareholders a dividend yield of 4.2%.
This makes CVX stock an attractive option for dividend investors, so let’s see if you should buy Chevron stock solely for its relatively high dividend yield.
Investors should understand that not every dividend-paying stock is a good investment. It’s essential to analyze the company’s fundamentals, such as its payout ratio, balance sheet debt, pricing power, and cash flows, to see if it can maintain and grow these payouts over…
