Will Chevron Extend Its Dominance?

With shares of Chevron Corporation (NYSE:CVX) trading at around $114.96, is CVX an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

chevron logoChevron has upstream and downstream operations, which makes it more diversified than most oil companies. Chevron was wise to stick with refineries when it wasn’t a popular thing to do. The company processed over 1 million barrels of crude last quarter.

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Sticking with the diversification theme, Chevron also engages in natural gas and alternative energy operations. This is a simple yet key point. Many people out there see Chevron as an oil company, but it’s important to understand that Chevron is much more. This is a highly strategic company that has set itself up to be successful no matter which way the energy market trends. For example, if alternative energy becomes the number one source of energy in the future, then Chevron will be a frontrunner. Forget about the little solar and wind companies struggling to survive, it is companies like Chevron, Exxon Mobil Corporation (NYSE:XOM), and General Electric Company (NYSE:GE) that will lead the way.

Getting back to Chevron, it plans to build a solar thermal demonstration project in Hawaii by 2014. This will be done in an effort to reduce costs. In other recent news, Ukraine wants to ink a shale-gas production-sharing deal with Chevron because it wants to reduce its energy reliance on Russia.

Now let’s take a look at some important numbers prior to forming an opinion on this stock…