Occidental Petroleum Corp. (OXY) has seen its fair share of volatility lately, bouncing up and down as energy stocks fall in and out of favor with the market. But with a compelling valuation and solid 2.1% dividend yield, OXY offers a unique combination of growth and income.
Company Description
Occidental Petroleum Corp. is as an integrated energy company, operating in exploration, refining and marketing. The company was founded in 1920 and has a market cap of $75 billion.
Even though energy stocks have been weak lately, earnings still look strong as energy companies capitalize on higher crude, natural gas and gasoline prices. That was on display when Occidental reported strong Q3 results in late October that came in ahead of expectations.
Third-Quarter Results
Revenue for the period was up 26% from last year to 6.01 billion. Earnings also came in strong at $2.18, 12% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 6% over the last four quarters.
The company was able to increase production to capitalize on higher crude, with daily oil and gas production up 5% from last year to 739,00) BOE (barrels oil equivalent).
Occidental’s midstream business, refining, also looked good, with earnings up 40% from last year to $378 million.
Estimates
We’ve seen some decent movement in estimates over the last month, with the current year up 9 cents to $8.12, a projected 40% increase from last year.
Valuation
In light of recent gains, OXY’s forward P/E of 11X is a premium to the industry average of 8X.
Dividend Yield
OXY looks solid on the dividend front too, with a yield of 2.10%.
12-Month Chart
On the chart, shares have rebounded sharply from the October low, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.
