This energy giant is a safer way for investors looking to be positioned in its sector, and it is the top energy sector pick for 2021 at BofA Securities. Chevron Corp. (NYSE: CVX) is a U.S.-based integrated oil and gas company, with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals. The company sports a sizable dividend and has a solid place in the sector when it comes to natural gas and liquefied natural gas.
The company gave some solid 2021 guidance earlier this month, and the analyst noted this:
Chevron provided guidance around capital expenditures through 2025. On a headline basis, the company expects to spend $14 billion in 2021 ($9.7 billion in cash capital expenditures), and $14-$16 billion annually in 2022-2025 relative to Chevron’s prior out year guidance of $19-22 billion, which excluded the Noble transaction. The company remains focused on investments in the Permian, other unconventionals, and the Gulf of Mexico.
Shareholders receive a 6.05% dividend, which the analysts feel comfortable will remain at current levels. BofA Securities has a $97 price target, but the consensus target is higher at $101.78. Chevron stock closed most recently at $85.33.
Johnson & Johnson
With a diverse product base and a very popular and solid brand, this is among the most conservative big pharmaceutical plays, and 44% of fund managers own the stock. Johnson & Johnson (NYSE: JNJ) is one of the top market cap stocks in the health care sector and raised its dividend this year for the 56th consecutive year.
With everything from medical devices to over the counter health items and prescription drugs, the company remains one of the most diversified health care names on Wall Street.
The health care giant also has one of the most exciting pipelines of new drugs in the sector. That combined with the solid over-the-counter product business makes the stock an outstanding holding for conservative accounts with a long-term investment outlook. The company generates a little over half of its sales in international markets, which are expected to see higher spending on health care over the next 10 years and beyond.
The $0.95 per share dividend was raised in the spring to $1.01, which equals a 2.65% yield. The $180 Goldman Sachs price target compares with a $167.35 consensus target. Johnson & Johnson stock closed at $152.47 per share.