Everyone is worried about energy stocks. It makes sense. Stocks in the sector have fallen hard over the past year as the price of oil has collapsed.

And that has many investors concerned that their dividends may be cut. The dividends are often why people invest in these names in the first place. And when it comes to the big players, like Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX), the safety of the dividend is an important factor in deciding whether or not to invest.

Chevron is currently a member of The Oxford Income Letter’s Compound Income Portfolio. I recommended it because of its strong yield and the fact that it had raised its dividend for 27 straight years.

The dividend is less stable than it was over a year ago when I put the stock in the portfolio. In fact, there are more than a few on Wall Street who expect the company to cut its dividend.

That’s not surprising considering Chevron hasn’t generated free cash flow since 2012. In 2015, free cash flow is expected to be negative $8.7 billion, during which time the company will pay $8 billion in dividends. Clearly, that’s not sustainable.

The good news is that in 2016, the company’s free cash flow is expected to improve greatly, though still end up at negative $71 million. Any rebound in the price of oil should put Chevron back into positive free cash flow territory.

Management said it is committed to sustaining the dividend. The company has made cuts to capital expenditures in order to free up cash. That’s a good sign that management is serious about its intentions.

I’m not naïve enough to think that just because a CEO says he won’t cut the dividend, that means it’s secure. But it certainly doesn’t hurt that he sticks his neck out by stating that the company does not plan to cut the dividend. Especially when it’s a company with a long and strong record of paying shareholders.

In fact, since 1984, the company has always maintained or raised the dividend. No CEO wants to be the guy to break an impressive record like that, particularly when he said he wouldn’t.

Because of the lack of cash flow, Chevron currently gets the Safety Net’s lowest rating. However, since cash flow is projected to improve this year, the company will likely get an upgrade after it reports full-year 2015 results in two weeks.

Additionally, management’s stated commitment to the dividend gives me a little more confidence that the dividend will be sustained. Any increase in the price of oil will only embolden that conviction.

Dividend Safety Rating: F

Good investing,

Marc