Chevron & Passive Income: A Slightly Cynical Take

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Right. Chevron. (CVX 0.57%). Let’s be honest, the phrase “passive income” feels… aspirational, doesn’t it? Like a permission slip to avoid actual work. But if you’re going to indulge that fantasy, you could do worse than a company that’s been happily handing out dividend increases for, oh, just 39 years straight. They just bumped it up 4%, which, in the grand scheme of things, is probably the most excitement I’ll have all week. It’s currently yielding 3.9%, which, frankly, is more than three times what the S&P 500 is offering. I mean, seriously. The S&P 500. So predictable.

So, the pitch is this: plunk down $3,000, and you’ll supposedly generate “hundreds” in passive income. Hundreds. It’s not going to fund a yacht, let’s be clear. But it’s enough to justify that daily oat latte, maybe? I’m just saying, small victories.

A High-Octane Stream (If You’re Lucky)

They’re currently paying out $1.78 per share quarterly, which works out to $7.12 annually. If you take that $3,000 and buy, say, 16 shares (at around $185 a pop, give or take the market’s mood swings), you’re looking at $113.92 over the next year. $28.48 a quarter. Enough to… contribute to the grocery bill? Let’s not get carried away. Over five years, if they maintain that rate (a big ‘if’, obviously), you’d collect $569.60. It’s not early retirement money, but it’s a start. And honestly, I’ll take any financial win right now.

But here’s the thing: Chevron isn’t exactly known for just maintaining things. They’ve got the second-longest dividend growth streak in the oil patch (ExxonMobil’s got 43 years, which, frankly, feels a bit excessive). They’ve been growing their payout at a 7% compound annual rate for the last quarter-century. 7%! That’s… actually impressive. I’m almost suspicious.

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Let’s be conservative and assume a more modest 4% annual growth rate. Here’s the (slightly optimistic) breakdown:

Annual dividend rate Annual dividend income
Year One $7.12 $113.92
Year Two $7.40 $118.48
Year Three $7.70 $123.22
Year Four $8.01 $128.14
Year Five $8.33 $133.27
Cumulative $617.03

And that, my friends, is significantly more than you’d get from a $3,000 investment in ExxonMobil. Just saying. I’m not advocating for spite investing, but… well, it’s tempting.

Plenty of Fuel (Apparently)

Look, past performance doesn’t guarantee future results. We all know that. It’s the disclaimer that haunts every financial advisor’s dreams. But Chevron’s commitment to dividends isn’t just a historical quirk. They generated $16.6 billion in free cash flow last year, even with falling oil prices. They’ve got a new acquisition (Hess), and completed major growth projects. They covered their dividend payments ($12.1 billion in 2025) and still had $27.1 billion to return to shareholders. It’s a fortress balance sheet. It’s… almost intimidating.

They’re expecting another $12.5 billion surge in free cash flow this year, and a more than 10% compound annual growth rate through 2030 (assuming oil stays around $70 a barrel, which is roughly where it is now). That should give them plenty of room to keep increasing that dividend. Maybe even faster than 4% a year. I’m starting to think they’re deliberately trying to make me feel financially inadequate.

An Excellent Income Stock (If You Can Stomach It)

Chevron has a pretty solid record of increasing its dividend, and it seems likely to continue. That makes it a decent option for those seeking passive income. Just don’t expect to retire to a tropical island on it. And maybe, just maybe, consider the ethical implications of investing in oil. I’m just saying, it’s something to think about while you’re counting your quarterly $28.48. It’s a complicated world, isn’t it?

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2026-02-21 15:13