Entering text into the input field will update the search result below

Occidental Petroleum: A Double-Digit Secured Yield With Future Growth Potential


  • On February 27, Occidental Petroleum's yield briefly jumped above 10% and there's no reason that that cannot continue going forward.
  • The company's hedging position means that its breakeven is at $40 / barrel. That supports the dividend and capital spending and its $10 / barrel below current prices.
  • Occidental Petroleum has significant potential and an impressive financial position from its assets. I expect the company will continue to reward shareholders well.
  • I do much more than just articles at The Energy Forum: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

Occidental Petroleum (NYSE: NYSE:OXY) has a market capitalization of less than $30 billion as Covid-19 fears have significantly punished the company. This has pushed the company’s yield towards 10%, a yield it briefly hit on February 27. As the market continues to worry, I wouldn’t be surprised to see it hit this yield again. However, as we’ll see throughout this article, a time of market worry can be an incredible opportunity to invest in a quality company.

Occidental Petroleum - Yahoo Finance

Occidental Petroleum 4Q 2019 Results

Occidental Petroleum’s recent 4Q 2019 results highlight a company progressive well on its merger plans. However, the market, spooked by Covid-19, ignored results while punishing share prices significantly.

Occidental Petroleum 4Q 2019 Highlights - Occidental Petroleum Investor Presentation

Occidental Petroleum closed $1.5 billion in asset divestitures in the quarter, a significant amount equivalent to ~5% of the company’s market capitalization. At the same time, the company continued to generate significant production, with 1.4 million barrels of production (exceeding the guidance midpoint by ~5%). From cash flow and asset divestitures, the company repaid $2 billion of debt.

For the full year, the company performed equally well. It repaid $7 billion of debt, announced $10.2 billion of divestitures, and had $1.2 billion in synergies. These are all significant numbers for a company with a market capitalization of $30 billion, and they highlight the strong strength of the company’s business. For reference, the company has more production than ConocoPhillips (NYSE: COP).

Occidental Petroleum Overall Goals - Occidental Petroleum Investor Presentation

The above slide shows the company’s goals and progress towards them. As we can see, the company has focused on a few significant things since the acquisition of Anadarko Petroleum. It’s worth nothing it’s hard not to argue that shareholders today would be better off if the company chose

Create a High Yield Energy Portfolio - 2 Week Free Trial!

The Energy Forum can help you build and generate high-yield income from a portfolio of quality energy companies. Worldwide energy demand is growing quickly, and you can be a part of this exciting trend. 

Image result for high yield oil

The Energy Forum provides:

  • Managed model portfolio to generate you high-yield returns.
  • Deep-dive research reports about quality investment opportunities.
  • Macroeconomic overviews of the oil market.
  • Technical buy and sell alerts. 

Click Here for a 2-week free trial, with an unconditional money back guarantee and 47% off of our most popular annual plan! There's nothing to lose and everything to gain!

This article was written by

The Value Portfolio profile picture
The #1 Service for Retirement Success, Actionable Ideas + Model Portfolios!

#1 ranked author by returns: 


The Value Portfolio focuses on deep analysis of a variety of companies across a variety of sectors looking for alpha wherever it is to maximize reader returns.

Legal Disclaimer (please read before subscribing to any services):

Any related contributions to Seeking Alpha, or elsewhere on the web, are to be construed as personal opinion only and do NOT constitute investment advice. An investor should always conduct personal due diligence before initiating a position. Provided articles and comments should NEVER be construed as official business recommendations. In efforts to keep full transparency, related positions will be disclosed at the end of each article to the maximum extent practicable. The majority of trades are reported live on Twitter, but this cannot be guaranteed due to technical constraints.

My premium service is a research and opinion subscription. No personalized investment advice will ever be given. I am not registered as an investment adviser, nor do I have any plans to pursue this path. No statements should be construed as anything but opinion, and the liability of all investment decisions reside with the individual. Investors should always do their own due diligence and fact check all research prior to making any investment decisions. Any direct engagements with readers should always be viewed as hypothetical examples or simple exchanges of opinion as nothing is ever classified as “advice” in any sense of the word.

Analyst’s Disclosure: I am/we are long OXY, WES. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.