Here's How Many Shares of Chevron You'd Need for $5,000 in Annual Passive Income
Key Points
Investors would need to own over 700 shares of Chevron to receive $5,000 in annual dividend income.
Chevron has increased its annual dividend for 39 consecutive years.
Chevron's adjusted free cash flow was nearly $12 billion more than what it paid out in dividends in the second quarter.
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Chevron (NYSE: CVX) has been on an impressive run, up 36.9% for the year as of Sept. 7. Despite its 2026 surge, though, Chevron's appeal has long been its dividend. Its current yield is around 3.4%, but over the past five years, it has averaged around 4%.
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Chevron's current annual dividend payout is $7.12 ($1.78 quarterly), so if your goal is $5,000 in annual passive income, you'd need to own 702.25 shares. If you were starting from scratch, it'd cost you nearly $146,500 at Chevron's $208.60 trading price at the time of writing.
Chevron's fourth $1.78 quarterly dividend will be paid in December. After that, the annual dividend will almost certainly increase. Chevron has increased its annual dividend for 39 consecutive years, and I don't see that streak ending anytime soon. Short of a bizarre unforeseen event, Chevron is well on its way to becoming a Dividend King (a company with 50 or more consecutive years of dividend increases).
If Chevron were to increase its annual dividend by 5% to $7.48 ($1.87 quarterly), those same 702.25 shares would now pay out $5,252.80 annually. That's the beauty of owning a dividend stock that's committed to increasing its annual payout like Chevron. You get the current above-average yield and get to look forward to increasing annual payouts on top of it.
In the second quarter, Chevron's adjusted free cash flow (which removes one-off events and accounting timing) was $15.4 billion, while it paid out only $3.5 billion in dividends. The payout ratio won't always be this high, but you can bet that Chevron will always have the cash and balance sheet to keep its dividend thriving.
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Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.
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