Chevron Corp (CVX) raised its dividend per share by 4.0% to $7.12 annually on Jan. 30, below expectations of a 5% increase to $7.18. The stock has risen 20% since mid-December, closing at $176.90 on Jan. 30, up 16.1% year-to-date. Shareholders expected a higher hike due to the company’s history of dividend growth.

Operating cash flow for Chevron was 15.2% higher at $34.9 billion for the full year, but adjusted free cash flow (FCF) was 5.2% lower at $20.2 billion. Q4 saw an adj. FCF decline of 47.5% YoY to $4.2 billion. The lower than expected cash flow impacted the decision to keep the dividend hike conservative.

The new $7.12 annual dividend will cost Chevron $14.24 billion, 16.7% higher than 2025. This could strain the company’s ability to increase dividends going forward. Analysts have mixed price targets for CVX stock, indicating potential overvaluation. Existing shareholders can utilize options strategies for income protection near the stock’s peak.

Read more at Barchart: Chevron Hikes Its Dividend – But It’s Less Than Expected