Dividend Increase | Chevron Corporation (CVX)

Dividend | Dividend Growth | Financial Independence | Freedom | Passive Income
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Chevron for another dividend increase!
There's an old Chinese proverb that says "the best time to plant a tree was 20 years ago, the next best time is now".  The reason for this is that it takes time for a tree to grow and prosper and for you to start reaping its benefits.  Dividend growth investing is much the same way.  It takes consistent saving and investing as well as time and patience to let the power of dividend growth take hold.

That's why one of my favorite things is when one of the companies I own decides to pay out more in dividends.  You mean I get a pay raise just for owning a small piece of a company?  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  

On January 30th the Board of Directors at Chevron Corporation (CVX) approved an increase to their quarterly dividend.  The dividend payout was increased from $1.12 to $1.19.  That's a solid 6.3% increase from the prior payout.  Chevron is a Dividend Champion with 31 consecutive years of dividend increases.  Shares currently yield 4.21% based on the new annualized payout.

The new $1.19 dividend payment will be payable on March 11th to shareholders of record as of February 15th.

Since I own 64.187 shares of Chevron in my FI Portfolio this raise increased my forward 12-month dividends by $17.97.  This is the 4th dividend increase I've received from Chevron since initiating a position in May 2013.  The total organic dividend growth since I initiated a position has been 19.0%.  According to US Inflation Calculator the cumulative rate of inflation over that same time is 7.8%.  

A full screen version of this chart can be found here.

Chevron's dividend growth has been very lumpy but that shouldn't come as a surprise since they are in a commodity based business.  Due to the ups and downs of the price of oil and gas I think it's much more important to look at dividend growth over longer periods of time since that should encapsulate more of the commodity pricing cycle and smooth out dividend growth over time.  The 10-year dividend growth rate for Chevron has regularly been in the 5-10% range which is just fine by me.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1985 can be found in the following chart.  

A full screen version of this chart can be found here.

*2019's dividend assumes the new payout of $1.19 per share is maintained for the rest of 2019.

Wrap Up

This raise increased my forward dividends by $17.97 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 3.06% this raise is like I invested an extra $588 in capital.  Except that I didn't!  One of the companies I own just decided to send more cash my way.  

That's how you can eventually reach the crossover point where your dividends received exceed your expenses.  That's DIVIDEND GROWTH INVESTING AT WORK!  The beauty of the dividend growth investing strategy is that you build up your dividends through fresh capital investment as well dividend increases from the companies you own.

Thus far in 2019 I've received 5 total increases from 5 of the 51 companies held in my FI Portfolio.  In total my forward 12-month dividends have increased by $42.32.

My FI Portfolio's forward-12 month dividends increased to $6,613.99.  Including my FolioFirst portfolio's forward dividends of $92.20 brings my total taxable accounts dividends to $6,706.19.  My Roth IRA's forward 12-month dividends increased to $413.64.

Do you own shares of Chevron or any other commodity based companies?

Please share your thoughts below.


  1. 'Do you own shares of Chevron or any other commodity based companies?'

    Have held shares in CVX, XOM, and TOT for many years and have watched these companies go through good times and bad times. Best thing for me to do is to just get out of the way and leave well enough alone. Quite frankly, that is a practice I follow for pretty much all my holdings.

    I refuse to own shares in mining companies. Cheers.

    1. I've owned CVX, XOM and BP for several years now and with all 3 of them I think the best practice is to just invest when they're cheap and then forget that you even own them.

      All the best.


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