CVX vs PSX: Dividend Comparison
Dividend data as of
Chevron Corp (CVX) and Phillips 66 (PSX) are both in the Energy sector, making them natural rivals for dividend investors. CVX edges ahead on yield at 3.75% versus PSX's 3.02%. Both stocks show similar dividend growth rates, each around 6.5% over the past five years. Both stocks carry a "Safe" dividend safety rating. CVX is a Dividend Aristocrat while PSX is a Dividend Contender.
Verdict
Yield Analysis
CVX yields 0.73% more than PSX. In dollar terms, CVX pays $6.84/share vs PSX's $4.75/share annually.
Dividend Growth
CVX: Dividend growth has been steady, with a 3-year CAGR of 6.4% and a 5-year CAGR of 6.5% (10-year: 5.3%).
PSX: Dividend growth is slowing — the 3-year CAGR of 6.3% trails the 5-year rate of 7.0% and the 10-year rate of 10.8%.
Dividend Safety
CVX: The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.0x.
PSX: The payout ratio of 44% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.3x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in CVX vs PSX today?
At $184.05 per share, $10,000 buys about 54.3 shares of Chevron Corp (CVX). Each share pays $6.84 per year in dividends, so the position starts out generating roughly $372 per year — about $31 a month.
At $159.16 per share, $10,000 buys about 62.8 shares of Phillips 66 (PSX). Each share pays $4.75 per year in dividends, so the position starts out generating roughly $298 per year — about $25 a month.
CVX is the larger income stream from day one: $73 per year more on the same $10,000 invested.
What could $10,000 of CVX or PSX income look like in 10 years?
Chevron Corp (CVX) has raised its dividend about 6.5% a year over the past five years. If that pace held, the $375 per year that $10,000 generates today at the current 3.75% yield would reach $706 per year by 2036 — a 7.1% yield on the original cost.
Phillips 66 (PSX) has raised its dividend about 7.0% a year over the past five years. If that pace held, the $302 per year that $10,000 generates today at the current 3.02% yield would reach $596 per year by 2036 — a 6.0% yield on the original cost.
On those trailing rates, CVX pays more in 2036: $706 versus $596 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would PSX's dividend growth overtake CVX's higher yield?
Not within a realistic holding period. Phillips 66 (PSX) is growing its dividend faster (7.0% vs 6.5% a year), but the starting-yield gap — 3.75% for CVX vs 3.02% for PSX — is wide enough that the crossover sits more than 30 years out on trailing rates. For income you plan to spend, CVX's head start is decisive.
Can CVX and PSX afford their dividends?
Chevron Corp (CVX) earns $6.63 per share against $6.84 paid out in dividends — 1.0x coverage (a 1% payout ratio).
Phillips 66 (PSX) earns $10.79 per share against $4.75 paid out in dividends — 2.3x coverage (a 44% payout ratio).
PSX's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for CVX if earnings weaken.
Which fits an early-retirement income portfolio better, CVX or PSX?
For income you need right now, Chevron Corp (CVX) leads: $100,000 invested today pays about $313 a month at the current 3.75% yield, versus $252 a month from Phillips 66 (PSX) at 3.02%.
With a decade or more before the income is needed, PSX's faster dividend growth (7.0% vs 6.5% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: CVX has raised its dividend 38 consecutive years; PSX has raised its dividend 13 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $1,021/yr in CVX vs $802/yr in PSX by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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