Chevron Announces 75 Billion Share Buyback and Dividend Increase

Chevron Announces $75 Billion Share Buyback and Dividend Increase

Chevron last month reported its second-highest quarterly profit ever.

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Energy giant Chevron announced a $75 billion share buyback program and a dividend increase on Wednesday night.

Chevron’s shares were up more than 2% in extended trading.

The buyback program will take effect on April 1 with no set expiration date, the company said in a press release. The dividend increase increases Chevron’s payout per share from $1.42 to $1.51, which will be distributed on March 10.

Chevron’s market cap was about $350 billion as of Wednesday’s close, meaning the buyback would represent more than 20% of the company’s stock at current prices.

This buyback plan follows a $25 billion plan passed in 2019. The old plan will end at the end of March. For the third quarter of 2022 — the latest quarter Chevron reported — the company repurchased $3.75 billion of stock.

The new buyback plan comes after a massive year for energy stocks, when a reopening U.S. economy and Russia’s invasion of Ukraine combined to boost oil and gas prices in 2022. Chevron reported free cash flow of more than $12 billion and net income of $11 billion in the third quarter alone.

Chevron’s stock rose more than 50% in 2022 even as the broader stock market declined.

Chevron was a hot stock in 2022.

The financial success of energy companies has drawn criticism from politicians, including US President Joe Biden, who last year threatened energy companies with higher taxes because of their “war profiteers”.

Chevron CEO Mike Wirth told CNBC in December that the company is “in touch” with the Biden administration on a variety of issues.

“Our goal of stable markets and affordable prices for the economy is something we share. We sometimes have different ideas about how to get there,” said Wirth on “Squawk Box”.