This Saturday, thousands of investors will descend upon Omaha, Nebraska like it’s Woodstock for spreadsheets. It's the Berkshire Hathaway annual shareholder meeting (aka the Coachella of compound interest) where folks gather in an arena surrounded by cornfields to watch an elderly man in a suit tell them to keep buying companies with strong moats and to never use margin. And you know what? I eat that sh*t up.

But while most people will be there to hear Grandpa Warren wax poetic about Coke, Dairy Queen, or maybe to see if he’s finally dumped those annoying bank stocks (he has), but with all eyes on the obvious names, I’m more interested in a different corner of his $290 billion portfolio. Chevron.

Buffett’s been building his position in Chevron for a while now… quietly but significantly. Today, Berkshire owns 118.6 million shares, valued at around $19.8 billion. That makes Chevron Berkshire’s fifth-largest holding, even ahead of Occidental Petroleum, another oil name Buffett’s shown love to over the past few years.

So what makes Chevron stand out? Let’s start with cash flow… the real kind, not the “adjusted EBITDA” fantasy money some companies like to wave around. In 2024, Chevron generated $31.5 billion in operating cash flow and $15 billion in free cash flow. From that pile, they returned nearly $12 billion to shareholders through dividends and repurchased over $15 billion in stock. That’s serious capital discipline.

And while many energy companies chase production growth for the sake of it, Chevron’s approach is more strategic. They’ve been actively trimming the fat. Just recently, the company sold a 70% stake in its East Texas gas assets for $535 million… but the deal was structured to still give Chevron long-term exposure to the upside, creating an estimated $1.2 billion in future value. That move fits into a broader $10–15 billion divestiture plan through 2028, aimed at optimizing their global portfolio.

In addition to shedding underperformers… Chevron’s doubling down on what works. Their $53 billion all-stock acquisition of Hess is a huge swing, giving them access to the Guyana oil-rich Stabroek Block and additional shale exposure in North Dakota. Once that deal closes, analysts say it could meaningfully extend Chevron’s free cash flow growth well into the next decade.

The company is also investing heavily in its most productive U.S. assets…  including the Permian Basin, the Gulf of Mexico, and the DJ Basin. $15 billion is being deployed into organic capital projects this year alone. By 2026, those efforts are expected to generate an additional $10 billion in free cash flow annually… even if Brent crude prices hover around $60.

And despite oil’s volatility, Chevron’s positioned to ride out the bumps. They’ve stress-tested their business for $50/barrel scenarios and still plan to maintain both their dividend and capital investments. That’s rare air in the energy sector. 

Which brings us to the dividend. Chevron currently yields around 4.9% (one of the highest among Buffett’s major holdings) and they’ve increased it for 38 consecutive years. That’s consistency you can plan a retirement around. And with buybacks likely continuing in the $10–20 billion range annually, shareholders could see even more per-share growth ahead.

It might not have the brand recognition of Coke or the glamor of Apple… but in terms of performance, stability, and long-term upside? Chevron might be Buffett’s most underappreciated masterpiece.

Stock.News has positions in Apple and Coca-Cola.