Chevron: A Diversified Oil Stock with a Strong Balance Sheet

Chevron is a resilient oil stock that could be a good investment in September, despite being historically one of the weakest months for the stock market. The company's diversification across upstream, midstream, and downstream businesses helps it better withstand market downturns than smaller companies that focus on a single market.

Chevron generates most of its profits from its upstream business, which has benefited from the recent spike in oil prices driven by conflict. However, it only needs the price of Brent crude oil to remain above $50 per barrel to comfortably cover its capex and dividends.

The company's fortress balance sheet should shield it from the next market crash, with $8.53 billion in cash and equivalents and a low net debt ratio of 13.1%. Chevron also expects to increase its oil and gas production by 2%-3% annually through 2030, supported by various growth projects.

Chevron is a rock-solid dividend investment, having raised its dividend annually for 39 consecutive years. Its forward yield is 3.4%, and it has plenty of room for future hikes after spending just 51% of its free cash flow on dividends over the past 12 months.