oil crashes, oil rallies... these dividends never stopped paying

Good morning.

I'm still at the cottage. The laptop is on the dock, the water is flat, and the only thing moving quickly this morning is crude oil.

Somehow the markets feel less urgent from out here, the portfolio continues to do the heavy lifting... and the oppotunities are always there.

Where Futures Sit

Futures are split this morning. S&P 500 contracts are off about 0.3%, Nasdaq 100 futures are down roughly 0.9%, and Dow futures are hovering near flat. The divergence tells you where the pressure is coming from... it is not broad selling, it is semiconductors.

Crude is the other story. Brent is trading near $78 a barrel, up better than 2% after gaining more than 5% last week.

Tickers To Watch

Semiconductors. This is today's pain trade. SK Hynix ADRs are down about 8% pre-market after surging 13% in Friday's Nasdaq debut, and the Seoul listing fell more than 15% overnight. Samsung dropped nearly 11%. The unwind is spreading: Micron off about 5%, Sandisk down 6%, Seagate down 4%, AMD and Intel both lower.

Energy. Occidental, Exxon, Chevron all catch a bid on the Hormuz escalation. Vessel traffic through the strait has collapsed... maritime trackers counted six crossings in a recent twelve-hour window against a normal run rate of 18 to 22 per day. That is a supply story, not a sentiment story.

The banks. Tomorrow's reports are the first real read on credit quality, net interest margin, and consumer health under a Fed that just told you rates stay higher for longer. Watch loan loss provisions more than headline EPS.

Stock Highlight

Chevron (CVX)

I am not highlighting Chevron because oil is up this morning.

Chasing a geopolitical headline into an energy position is how people get hurt.

I am highlighting it because of what it does in a portfolio when the headline fades.

Chevron declared a quarterly dividend of $1.78 in April, putting the annualized payout around $7.12 per share. At recent prices that works out to roughly a 4% yield.

More important than the number is the record behind it: Chevron has raised its dividend every single year for close to four decades, through the 2015 crash, through 2020 when crude briefly went negative and lesser producers slashed their payouts to survive.

The reason it can do that is structural. Chevron is integrated. When crude falls, refining margins tend to widen, which cushions the upstream hit. When crude rises, the upstream side carries the load. The 2025 Hess acquisition added a 30% stake in Guyana's Stabroek block, where breakevens run in the $25 to $35 range... long-duration, low-cost barrels that fund the dividend well into the next decade. 

The honest caveat: Chevron carries more oil price leverage than some of its integrated peers, so it falls harder when crude falls. Size the position accordingly.

Best

Greg

FYI Here's my scan of CVX, using TheStockAnalyzer

It's a scanner I built for myself, I'm happy to share it 

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