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Wednesday, 01/02/2002

CVX - ChevronTexaco

Company Description

Chevron-branded products are sold in North America by business units of ChevronTexaco Corp. Included are Chevron Products Co., which operates six major U.S. refineries and markets petroleum products, primarily gasoline. The Global Lubricants business markets motor oils and many other types of lubricants. Global Aviation oversees the marketing of general aviation fuels.

Based in San Ramon, Calif., Chevron Products Co. is one of the largest refiners and marketers of petroleum products in the United States. With six refineries and 7,900 retail outlets, it serves customers in 29 states - - primarily in the West, Southwest and South. It is also one of the top three asphalt sellers in the nation, a product supplied by two additional asphalt refineries in Willbridge, Ore., and Perth Amboy, N.J.

Chevron Product's three largest refineries -- in Pascagoula, Miss. and the California cities of Richmond and El Segundo -- are complex and highly efficient facilities, each a strong competitor in its respective region. The West Coast refineries are configured to reliably produce large volumes of high-value, cleaner-burning gasoline and diesel fuels, designed to meet the specific and stringent air quality needs of the California market. The company's three smaller refineries --on the Hawaiian island of Oahu, in El Paso, Texas and Salt Lake City, Utah -- are positioned to take advantage of growing niche markets.

(Source: ChevronTexaco)

Reasons To Invest

There are several catalysts at play in ChevronTexaco that could take the stock higher over the next 12 to 18 months. One of which is a macro economic event, the other company specific.

OPEC recently agreed to a production cut of 1.5 million barrels of crude oil per day. The cartel is trying to add support to the weak price of oil, which has slid lower in the last year because of weak demand due to the slumping global economy and overcapacity. Meanwhile, major oil concerns have been scrambling to reduce supply. The pieces are falling in place to see a rally in the price of oil, with the economy rebounding, OPEC determined to cut supply and the oil companies doing the same. It's a classic supply/demand set-up.

ChevronTexaco, which not too long ago was two separate and very big oil companies, will benefit from the synergies created by the merger over the next twelve months. The combined company will cut costs and boost profitability, making it one of the premier plays in the next cycle higher in the energy market.

All the while, investors can collect the chunky dividend that comes along with owning shares of ChevronTexaco. At present, the stock is yielding over 3 percent annually. The dividend alone could carry this stock higher in the New Year as investors seek out better returns that cash accounts with 1 handles.

DRIP Information:
Shares to Qualify = 1           Accept Foreign Accounts: Yes
Auto-reinvestment = Yes         Temper Enrollment Serv:  Yes

Min/Max Investment = $50 to $100,000/year
Reinvestment Fees: 
Dividend: 5% to $2.50 + 8 cents/share   Cash: $3 + 8 cents/share
Auto ReInvest: $1.50 + 8 cents/share

Transfer Agent:



Industry Group:   Integrated Oil  52-week high=$98.49
Annual Dividend Per Share=  2.80  52-week low =$78.44
Last earnings 10/20   est = 1.45  actual = 1.82
Next earnings 01-20   est = 0.92  versus = 2.21
                                    P/E  = 11.62
Analyst Ratings:
Strong Buy    = 8
Moderate Buy  = 3
Hold          = 9
Moderate Sell = 0
Strong Sell   = 1


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