chevron: an owner's manual for investors

ChevronAn Owner's Manual for Investors

you're entitled to a share of its earnings.

As an owner of Chevron's stock

NOT TO SCALE

obviously

$8.7

Billion

Chevron's

12-Month

Earnings

Chevron's

Earnings

Per Share

$4.60

If you divide Chevron's share price

by its earnings per share (EPS), you

get its price-to-earnings ratio.

P/E

Ratio=

Share Price

EPS19.41=

$89.32

$4.60=

This is how much it costs to buy $1

of Chevron's annual earnings.

A higher P/E ratio implies a lower

potential return.

1

10

100

1,000

100 Biggest S&P Companies

P/E

Rati

o

Most companies have P/E ratios

between 12 and 30.

What Is a Typical Stock's P/E Ratio?

You can also use Chevron's P/E ratio

to derive its earnings yield.

1

19.41 5.2%Chevron's

Earnings

Yield

1

P/E Ratio= ==

This helps you compare a stock

to other types of investments,

such as bonds and real estate.

5.15%

6.63%

4.33%

2.90%2.45%2.21%

Chevron's

Earnings

Yield

Class A

Office

Building

Cap Rate

S&P 500

Earnings

Yield

10-Year

AAA Corp.

Bonds

5-Year

CDs

10-Year

Treasuries

Average Rates of Return

Of course, if you own one share of

Chevron stock, you don't get a check

each year for its EPS.

You receive quarterly dividends

instead, which typically account

for only a portion of total earnings.

94%

Chevron's Payout RatioThe payout ratio is the percentage of earnings

paid as dividends. Anywhere from 30% to

70% is normal.

4.79%Chevron's Dividend Yield

Chevron's

Dividend

Yield

=

Dividend

per Share

Share

Price

=$4.28

$89.32= 4.79%

You can then use this to compare

stocks based on their income-

generating potential.

4.79%

3.80%

3.29%

2.84%

1.68%

0.72%

Chevron IBM Wal-Mart PepsiCo Comcast Visa

Representative Dividend Yields

Chevron also buys back its own stock.

This reduces its share count, which

increases the ownership interest

of each remaining share.

$1.1

Billion

-0.7%

Chevron's

Buybacks

(TTM)

Change in

Chevron's

Share Count

(TTM)

Chevron's stock?So, what does the future hold for

Chevron

135%

S&P 500

114%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Today20132011200920072005

If the Past Is Prologue...Total return since Jan. 1, 2005

Chevron's earnings to grow.

While it's impossible to predict the

future with precision, analysts expect

$3.53

$3.98

Current Fiscal Year Next Fiscal Year

Average Earnings per Share Estimate Among Wall

Street Analysts

Divining Chevron's Future

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