Chevron’s Downstream segment engages in refining crude oil into petroleum products; marketing crude oil, refined products and lubricants; manufacturing and marketing of renewable fuels; transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses and fuel and lubricant additives. It is also involved in the cash management and debt financing activities; insurance operations; real estate activities; and technology businesses.
The company stated recently that it is considering producing lithium for electric vehicle batteries, and while that will never replace any of its core business, it is another way to continue to generate the remarkable cash flow the company produces.
Chevron stock comes with a 3.86% dividend. Raymond James has set a $208 target price, well above the consensus target of $185.13 and Wednesday’s $161.34 closing share price.
Citigroup
This top bank has rallied nicely off the lows and Warren Buffett bought $2.5 billion worth of stock back in the summer of 2022. Citigroup Inc. (NYSE: C) is a leading global diversified financial service company that provides consumers, corporations and governments a broad range of financial products and services.
Citigroup offers services such as consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. And it operates and does business in more than 160 countries and jurisdictions in North America, Latin America, Asia and elsewhere.
Trading at a still cheap 7.0 times estimated 2023 earnings, Citigroup looks very reasonable in what remains a volatile stock market and in a sector that has dramatically lagged. Citigroup posted first-quarter earnings and revenue that each surpassed Wall Street expectations, thanks to a rise in fixed-income trading.
The dividend yield here is 4.30%. The $75 Oppenheimer price target is a Wall Street high. Citigroup stock has a consensus target of $55.76, and shares closed on Wednesday at $47.49.
Kraft Heinz
Even in bad times, everybody has to eat, and Kraft Heinz Co. (NASDAQ: KHC) always stands to benefit. The company was formed almost six years ago in the merger of H.J. Heinz and Kraft Foods. The company is a leading global food company, with $25 billion in annual revenues generated by such well-known brands as Kraft, Heinz, Oscar Meyer and Maxwell House. It is also one of America’s most trusted food and drink brands.
The company is the third largest food and beverage manufacturer in North America and derives 76% of revenues from that market and 24% from overseas. The company’s other brands include ABC, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero, Weight Watchers Smart Ones and Velveeta.
Note that Buffett holds a big position in the stock at Berkshire Hathaway.
Kraft Heinz stock investors receive a 4.40% dividend. BofA Securities has a price target of $50. The $38.99 consensus target is closer to Wednesday’s $36.36 closing share price.
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