Chevron Analysis Essay examples

4466 Words Feb 4th, 2013 18 Pages
“The Chevron Analysis”
Instructor: Mr. James McCague
Class: FIN 4461
By: Jairo Rivero

Company Position Chevron is a world-renowned company that is a leader in the development of energy resources that help drive human progression. The ability to meet the needs of ever-expanding energy consumption is what makes Chevron an innovative and market leading company. When people think of Chevron many think of “Big Oil”, when in fact, its business strategy is very complex and entails: * Exploration and Production (oil and natural gas) * Manufacturing, Products (lubricants, etc.) * Transportation (global trading, pipelines, shipping, etc.) * Other businesses (chemicals, mining, power and technology)
“The company’s vision is
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“Chevron (CVX, news, msgs) shares have grown four times faster than those of rival Exxon Mobil (XOM, news, msgs) during the past year. If you bought Chevron's shares three years ago, you would have gained an average of 5.6% a year instead of losing 2.4% on Exxon” (MoneyCentral.msn). Chevron shows a trend of steady increase in stock price.

Having an increasing stock price throughout the years establishes Chevron as a growth stock (immediate and long term) and matches the investment strategy for our portfolio and the proposed purchase of 10,000 shares. The Business Monitor International (BMI) is the oil industry’s “watchdog” and provides unparalleled analysis and risk evaluation. “The BMI model predicts average annual oil demand growth of 1.62% between 2011 and 2015, before slowing to 1.34% between
2016 and 2020” (Americas Oil and Gas Insight). The continuous increase in demand will assure that Chevron will stay profitable and its stock will remain an attractive buy for investors. Competition in the oil and energy industry is very intense. Each company is investing money in an upward stream strategy in order to grow their profitability in core areas and also expand in new ones. Chevron is such a large company that it is in a league of “heavy hitters”. Some of its major competitors include: Exxon Mobil, Royal Dutch Shell, BP and ConocoPhillips. The company’s largest competitor is Exxon Mobil, which is the world’s largest publicly traded international

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