Time to Dive Into Warren Buffett’s Dividend Stock: Occidental Petroleum

The energy sector is buzzing with activity as geopolitical strife in the Middle East sends shockwaves across global markets. Worries about potential supply disruptions have propelled crude futures (CLX24) to one-month highs recently, even as demand fears stemming from China’s economic slowdown attempt to cap short-term rallies. Amidst this volatile oil price environment, savvy investors are on the lookout for undervalued dividend stocks in this space.

One notable opportunity is none other than Occidental Petroleum (OXY), the same dividend-paying energy stock that’s caught the eye of investing magnate Warren Buffett. Known for his incredible knack for spotting promising investments, Buffett has consistently increased his stake in Occidental, making it a compelling case for investors eager for a slice of the action. Let’s break down why this stock is flying under the radar and how you can capitalize on it.

Occidental Petroleum’s Financial Flashlight

With a market value of $48.5 billion, Houston-based Occidental Petroleum plays a key role in the oil and gas industry. Its operations are deeply integrated, covering exploration, production, and petrochemical endeavors. However, OXY has struggled in 2024, down 9.7% year-to-date and 16.3% over the past year, even retreating 24% from its April peak. Yet, despite these challenges, Buffett made waves by buying more shares during Q2, unlike his move with oil giant Chevron (CVX). OXY now makes up 4.3% of Berkshire Hathaway’s equity portfolio, signifying a substantial commitment.

When we analyze OXY’s valuation using the forward EV/EBITDA ratio, it stands at 5.55, which is below the sector median of 6.03. This indicates that OXY is currently undervalued relative to its peers. Moreover, its current valuation also beats its historical averages, offering a juicy opportunity for value investors willing to follow Buffett’s lead.

Support For Investors: Consistent Dividends

For investors seeking reliable income amidst the energy market’s ups and downs, OXY has remained committed to its shareholders. The company provides a quarterly dividend of $0.22 per share, translating to an attractive yield of approximately 1.61%. While it’s not the highest in the sector, this dividend offers a stable income stream, helping investors navigate through any market turbulence.

Strategic Developments at Occidental Petroleum

Occidental is making strategic plays that are worth noting. Recently, the company joined forces with BHE Renewables, a subsidiary of Berkshire Hathaway Energy, to venture into lithium extraction. This innovative approach taps into the burgeoning electric vehicle (EV) market—a sector poised for explosive growth. But don’t be misled; OXY isn’t abandoning its fossil fuel roots. The recent acquisition of CrownRock, L.P. aims to boost its low-cost production capacity in the Permian Basin, ensuring OXY can remain competitive.

Debt management is another focus area for OXY. The company has been proactive, culling $3 billion off its debt in Q3 2024. They’ve also been divesting non-core assets, with recent sales in the Delaware Basin netting $818 million. This aligns with their strategy to divest between $4.5 billion and $6 billion worth of assets, a move designed to trim debt while supporting growth initiatives.

Analysts Have Positive Outlooks

As we anticipate OXY’s next earnings report scheduled for November 12, analysts maintain an optimistic forecast. The outlook for the full fiscal year 2024 anticipates earnings of $3.48 per share, representing a slight dip of about 6% annually, but an increase to $4.16 for fiscal year 2025 is on the horizon. Current market sentiment is generally constructive, with analysts projecting a mean price target of $66.04. This indicates a potential upside of approximately 22.5%, enticing bullish excitement among investors.

Conclusion: Assessing the Investment Landscape

In the realm of undervalued stocks, Occidental Petroleum (OXY) stands out, especially when backed by Warren Buffett’s investments. With appealing valuation metrics, steady dividends, and well-thought-out growth strategies, OXY is strategically positioned to capitalize on the evolving energy landscape. As OXY continues to strengthen its financial footing and explore strategic expansions, it offers a compelling opportunity for profit, particularly for those ready to align their investment strategies with Buffett’s keen approach.

Keep a close eye on Occidental and consider adding it to your portfolio while it’s still a bargain!

DISCLAIMERS – THIS IS A PAID ADVERTISEMENT.

TipsForTraders.com

This is a paid advertisement, not a recommendation nor an offer to buy or sell securities. Our business model is to be financially compensated to market and promote public and private companies. By reading this email, our website / media webpage you agree to the terms of our disclaimer, which are subject to change at any time. We are not registered or licensed in any jurisdiction whatsoever to provide investing advice or anything of an advisory or consultancy nature and are therefore unqualified to give investment recommendations. Always do your own research and consult with a licensed investment professional before investing.

This communication is never to be used as the basis for making investment decisions and is for entertainment purposes only. At most, this communication should serve only as a starting point to do your own research and consult with a licensed professional regarding the companies profiled and discussed. Conduct your own research. Companies with low price per share are speculative and carry a high degree of risk, so only invest what you can afford to lose. By using our service you agree not to hold our site, its editor’s, owners, or staff liable for any damages, financial or otherwise, that may occur due to any action you may take based on the information contained within our website / media webpage.

For a full disclaimer & disclosure please click here.

This communication is a paid advertisement and is not a recommendation to buy or sell securities. IR PUB Network, and its owners, managers, employees, and assigns (collectively “the Company”) has been paid by the profiled companies or a third party to disseminate this communication. IThis compensation is a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication.

Gains mentioned in this article, in our newsletter and on our website may be based on end-of-day or intraday data. Therefore, this communication should be viewed as a commercial advertisement only. The information is collected from public sources, such as the profiled company’s website and press releases, but is not researched or verified in any way whatsoever to ensure the publicly available information is correct. Furthermore, IR PUB Network often employs independent contractor writers who may make errors when researching information and preparing these communications regarding profiled companies. Independent writers’ works are double-checked and verified before publication, and approved by the company that is featured herein, but it is certainly possible for errors or omissions to take place during editing of independent contractor writer’s communications regarding the profiled company(s).

You should assume all information in all of our communications is incorrect until you personally verify the information, and again are encouraged to never invest based on the information contained in our written communications. The information in our disclaimers is subject to change at any time without notice. We have not thoroughly investigated the background of any of the companies we profile. The third party, profiled company, or their affiliates may liquidate shares of the profiled company at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor awareness marketing, which often end as soon as the investor awareness marketing ceases. We do not guarantee the timeliness, accuracy, or completeness of the information on our site or in our newsletters. The information in our communications and on our website is believed to be accurate and correct, but has not been independently verified and is not guaranteed to be correct. The information is collected from public sources, such as the profiled company’s website and press releases, but is not researched or verified in any way whatsoever to ensure the publicly available information is correct.

NOT AN INVESTMENT ADVISOR. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation.

ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

INDEMNIFICATION/RELEASE OF LIABILITY. By reading this communication, you agree to the terms of this disclaimer, including, but not limited to: releasing the Company, its affiliates, assigns and successors from any and all liability, damages, and injury from the information contained in this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.

RISK OF INVESTING. Investing is inherently risky. While a potential for rewards exists, by investing, you are putting yourself at risk. You must be aware of the risks and be willing to accept them in order to invest in any type of security. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell securities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. We do not advise any reader to take any specific action. Losses can be larger than expected if the company experiences any problems with liquidity or wide spreads. Our website / media webpage are for entertainment purposes only. Never invest purely based on our featured profiles on Companies. Gains mentioned in our website / media webpage(s) may be based on end-of-day or intraday data. This publication and their owners and affiliates may hold positions in the securities mentioned in our alerts, which we may sell at any time without notice to our subscribers, which may have a negative impact on share prices. The past performance of any trading system or methodology is not necessarily indicative of future results. All trades, patterns, charts, systems, etc., discussed in this message and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author and do not necessarily reflect those of the publisher.

Blog

Discover Warren Buffett’s Hidden Gem: Why Occidental Petroleum is the Dividend Stock You Can’t Ignore