Can Occidental Petroleum's Recent Upswing Be a Sign of Better Things to Come?

Should You Reconsider Occidental Petroleum and Buy?

By David Haigh, InvestorPlace Staff

Mar 29, 2023

In recent weeks, Occidental Petroleum (OXY) has been a hot topic among investors. The company's stock has been on a tear, and many are wondering if this is the right time to get in on the action.

After all, OXY has been a consistent performer over the years, with a strong track record of generating cash flow and paying dividends. And with the global energy landscape continuing to shift, the company's focus on shale oil and gas production could be a major winner in the long run.

Of course, there are always risks involved with investing in the energy sector. But for those who are willing to take a chance, OXY could be a compelling opportunity.

One of the main reasons to consider OXY is its strong financial position. The company has a solid balance sheet, with a debt-to-equity ratio of just 0.3. This gives it the flexibility to invest in new projects and return capital to shareholders.

In addition, OXY has a proven track record of generating cash flow. In 2022, the company generated over $2.5 billion in free cash flow, which it used to pay down debt and return capital to shareholders. This is a key metric for investors, as it shows that the company has the ability to generate the cash it needs to fund its operations and pay dividends.

Another reason to consider OXY is its focus on shale oil and gas production. This is a growing area of the energy sector, and OXY is well-positioned to benefit from it. The company has a large portfolio of shale assets, and it has been investing heavily in new drilling and completion technologies to improve its efficiency and productivity.

Finally, OXY has a strong management team in place. The company's CEO, Vicki Hollub, has a long history of success in the energy industry, and she has a clear vision for the company's future. This gives investors confidence that OXY will continue to make smart decisions and execute on its strategy.

Of course, there are always risks involved with investing in the energy sector. But for those who are willing to take a chance, OXY could be a compelling opportunity. With its strong financial position, proven track record of generating cash flow, focus on shale oil and gas production, and strong management team, OXY is a company that is well-positioned for long-term success.