1 Magnificent High-Yield Stock Down 15% to Buy and Hold Forever

Key Points

• A post-coronavirus pandemic rally has petered out, leaving the oil giant down some 15% from its highs.

• The stock's dividend yield is above the industry norm, suggesting it is an attractive income choice.

• Plus, some company-specific headwinds that had been holding the shares down are abating.

• 10 stocks we like better than Chevron ›

An inflation spike coming out of the coronavirus pandemic helped to boost the profits of energy companies. But after hitting a peak, oil and natural gas prices have come back down. That has taken the wind out of the sector's sails, but one of the industry's largest competitors -- Chevron's (NYSE: CVX) -- performed even worse than its closest competitor and is still down over 15% from its highs.

There's still a chance to buy the stock while it has a well above average yield. Here's what you need to know.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

What goes up always goes down

Oil and natural gas are commodities prone to large and often rapid price swings. So the ups and downs around the pandemic aren't really that unusual. Still, investors react to the price swings in fairly predictable fashion. When energy prices rise, Wall Street tends to boost the shares of oil and gas producers. The reverse happens when energy prices fall.

Image source: Getty Images.

That's the big picture for Chevron's price decline since the oil price rally turned into an oil price decline. However, there are some other factors at play with this energy industry giant. Notably, a large acquisition (Hess) got stuck in court because of complaints about the deal from Chevron's competitors. And Chevron's investment in Venezuela is an off again/on again political headache. Both issues were negatives not too long ago, helping to keep Chevron's shares depressed. Even more so than its closest peer, ExxonMobil.

The end result is that, even now, Chevron is offering an attractive investment opportunity. Notably, the stock's dividend yield is 4.4%. Exxon's yield is 3.7%. The average energy stock's yield is 3.2%. And the S&P 500 index's yield is a scant 1.2%. This is an opening you won't want to miss if you are looking to invest in the energy sector.

Chevron is built to survive the energy cycle

For starters, Chevron's company-specific headwinds are abating. Its deal to buy Hess has been approved and completed. And while Venezuela will always be a sore point, the headwinds have evened out around this investment for the time being. Thus, the overhang from these issues is largely gone, which helps to explain Chevron's recent stock price rally, which has been stronger than the rally of Exxon's shares.

What's more, it is important to keep in mind that the outsized yield is on very solid ground. Chevron has increased its dividend annually for a huge 38 consecutive years. And it has one of the strongest balance sheets among its integrated energy peers. This diversified and financially strong energy giant is built to survive the inherent ups and downs in the energy patch.

There's still time to act, if you act quickly

To be fair, there will always be risk here because of the nature of the energy sector. But the reward today looks very attractive, given the relatively attractive yield Chevron is offering. If you are looking for an energy investment, this one should be close to the top of your buy list. And given the strength of Chevron's business and the success it has had navigating oil price volatility, it is the kind of energy stock that even a conservative dividend investor can buy and hold for the long term.

Should you invest $1,000 in Chevron right now?

Before you buy stock in Chevron, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chevron wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,544!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,113,059!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 13, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.