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Chevron Valuation Sheet

CVX
09-chevron-comparable-valuation-sheet

Chevron’s stock outperformed those of Royal Dutch Shell and BP, and is neck-to-neck with Exxon’s. The company’s growth figures and profitability position is better than that of Exxon’s, as the former’s earnings grew 7% annually over the last five years, whereas the latter’s profits grew 3%, and Chevron’s operating margin is 13% while Exxon’s is 10%.

Chevron Comparable Valuation Sheet

 

Chevron    

ExxonMobil   

Royal Dutch Shell   

BP

5yr. Revenue CAGR (FY07-FY12)

1.76%

3.25%

5.60%

5.72%

1yr. Revenue growth

-5.80%

-2.96%

-0.64%

0.02%

5yr. Earnings CAGR (FY07-FY12)

6.98%

2.76%

-3.41%

-11.01%

Operating margins (3QFY13)

12.75%

9.69%

6.53%

4.65%

Future EPS CAGR (FY13-16)

7.9%

5.1%

3.5%

7.4%

Reserve per Share (FY12)

5.83

5.59

2.11

0.89

Reserve life (FY12)

11.9yrs

16.2yrs

11.2yrs

13.9yrs

Reserve replacement ratio (FY12)

112%

115%

45%

40%

12-month Forward Dividend Yield (2QFY13)      

3.32%

2.71%

4.87%

5.42%

 

Shareholder Yield (3QFY13)   

5.22%    

7.91%   

4.01%   

3.92%

Debt to Equity (3QFY13)

13.9%

11.3%

20.6%

38.3%

P/E (FY14)

9.9x

11.7x

8.6x

9.1x

PEG ratio

1.25

2.29

2.46

1.23

EV/EBITDA

5.3x

6.8x

4.8x

7.0x

Exxon and Chevron have by far performed better than their European counterparts, Royal Dutch Shell and BP. Among the two outperformers, Chevron ranks above Exxon in terms of profitability as its operating margins and earnings growth, both current and future, are higher. In terms of sheer size of operations, Exxon leads with its highest reserve life and reserve replacement ratio even though Chevron has higher reserves per share. Multiples show Chevron is priced considerably lower compared to its peers, considering that its future earnings growth is the highest.

Valuation matrix

 

EPS

$7.00  

$7.50   

$8.00   

$8.50   

$9.00

P/E     

8.0x

$80

$88

$96

$104

$112

10.0x

$100

$110

$120

$130

$140

12.0x

$120

$132

$144

$156

$168

14.0x     

$140

$154

$168

$182

$196



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