Stock of the Day

June 14, 2024

Occidental Petroleum (OXY)

$50.42
-$1.68 (-3.2%)
Market Cap: $48.89B

About Occidental Petroleum

Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, and North Africa. It operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing. The company's Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas. Its Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride; and vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also invests in entities. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.

Occidental Petroleum Bull Case

Here are some ways that investors could benefit from investing in Occidental Petroleum Co.:

  • Occidental Petroleum Co. reported earnings per share of $0.80 for the latest quarter, exceeding analysts' expectations of $0.67, indicating strong financial performance.
  • The company has recently increased its quarterly dividend from $0.22 to $0.24 per share, reflecting a commitment to returning value to shareholders. This translates to an annualized dividend yield of 1.88%.
  • Insider buying activity has been notable, with major shareholder Berkshire Hathaway Inc. purchasing over 763,000 shares recently, suggesting confidence in the company's future prospects.
  • Analysts have a consensus target price of $61.71 for Occidental Petroleum Co., indicating potential upside from the current stock price, which is around $46.82.
  • With a net margin of 15.89% and a return on equity of 15.98%, the company demonstrates effective management and profitability, which are attractive traits for investors.

Occidental Petroleum Bear Case

Investors should be bearish about investing in Occidental Petroleum Co. for these reasons:

  • The company reported revenue of $6.84 billion, which fell short of the consensus estimate of $7.14 billion, indicating potential challenges in meeting market expectations.
  • Recent analyst downgrades, including a reduction in price targets by firms like Goldman Sachs and StockNews.com, suggest a cautious outlook on the stock's performance.
  • Insider ownership is relatively low at 0.48%, which may indicate less alignment between management and shareholder interests compared to companies with higher insider ownership.
  • With three analysts rating the stock as a sell and twelve as a hold, the overall sentiment among analysts is mixed, which could lead to volatility in stock performance.
  • The company's dividend payout ratio is currently at 22.92%, which, while sustainable, may limit the potential for future dividend increases if earnings do not grow significantly.

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