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.
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.
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.