There Are Only a Handful of Dow Stocks That Yield Over 3%. Here's My Top Pick to Buy Before September Ends.

Chevron offers a 3.4% dividend yield following a 4% increase in its quarterly payout to $1.78 per share, extending its dividend-growth streak to 39 years; it returned $27.1B to shareholders in 2025 through dividends, buybacks, and Hess share purchases. Its Energy Forge One unit signed a 20-year power purchase agreement with Microsoft for the proposed 2.67GW Project Kilby data-center power facility in Texas, potentially adding more contracted and predictable cash flow than Chevron's commodity-linked oil and gas operations. Additional catalysts include an Angola discovery, expanded base-oils distribution, and a planned $7B Venezuela investment intended to more than double production to 600,000 barrels per day.

Analysis

The relevant valuation question is not whether CVX has signed a marquee customer, but whether it can earn utility-like returns after gas supply, turbine procurement, construction, and counterparty concentration are fully priced. A behind-the-meter data-center project can monetize Permian gas at a premium to basin prices and reduce exposure to pipeline constraints, but it also shifts CVX toward execution and power-market risk rather than eliminating cyclicality. At CVX’s scale, one project will not move consolidated cash flow materially; the rerating case requires a replicable portfolio with disclosed project-level returns and contracted capacity.

Near term, final investment decision, turbine delivery schedules, and any disclosure of Microsoft credit support or minimum-volume obligations are the catalysts over 1-3 months. The more investable read-through may be for GEV: incremental gas-turbine demand from hyperscalers extends an already supply-constrained order cycle, supporting pricing and service-revenue visibility over 6-18 months. CAT benefits at the margin through Solar Turbines, although its diversified earnings base makes the direct impact less meaningful.

Consensus may overstate the defensiveness of the power narrative. AI load growth is real, but data-center customers retain leverage if construction timelines slip, and distributed gas generation faces permitting, emissions, and fuel-price risks; a fixed power price without fuel pass-through could create an adverse margin profile in a high-gas-price environment. Separately, Venezuela upside should receive little multiple credit until sanctions durability, payment repatriation, and capital-recovery terms are independently clear; it is a source of geopolitical optionality, not base-case free cash flow.

Key Decisions for Investors

• Keep CVX market-weight pending the project FID and disclosure of returns, fuel pass-through, and committed capital. Upgrade to long only if management demonstrates repeatable contracted-power economics without reducing buyback capacity; thesis is falsified by weaker 2027-28 capital-return guidance or project IRRs below upstream reinvestment returns.
• Prefer a 6-12 month long GEV / short CAT pair for data-center gas-generation exposure, sized modestly given GEV’s valuation sensitivity. The trade works if turbine backlog, pricing, and service attach rates continue to exceed expectations; exit if hyperscaler capex guidance weakens or GEV’s order conversion slips.
• Use CVX versus XOM as a relative-value watch rather than an immediate pair trade: go long CVX / short XOM only after evidence that contracted-power projects can scale beyond a single site. A sustained decline in Permian gas differentials or an oil-price-driven sector rally would reduce the relative catalyst.
• Treat Venezuela as downside-risk monitoring: reduce CVX exposure on material sanctions tightening, restrictions on export licenses, or evidence of stranded receivables. Do not capitalize projected production growth in valuation until cash-remittance mechanics and project spending are confirmed.