OXY  Occidental Petroleum Corporati...

Exchange

NYSE

Sector

Energy

Industry

Oil & Gas Production

Market Cap.

49.58B

Vuru Grade

33.00/100

Current Price

$64.89
-0.36 (-0.55%)

Growth Price

$9.79
Overvalued by 84.92%

Company Metrics

  • P/E 97.0041
  • P/S 4.94
  • P/B 2.32
  • EPS -0.75
  • Cash ROIC 3.46%
  • Cash Ratio 0.47
  • Dividend 3.04 / 4.61%
  • Avg. Vol. 4.70M
  • Shares 764.06M
  • Market Cap. 49.58B

Company Description

Occidental Petroleum Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company primarily in the United States. The company operates in three segments: Oil and Gas; Chemical; and Midstream, Marketing, and Other. The Oil and Gas segment explores for, develops, produces, and markets crude oil, natural gas liquids, and condensate and natural gas. Its do... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Insider Trading Activity Occidental Petroleum Corporation (NYSE:OXY ...
Market Exclusive - 20 hours ago
On 5/23/2013 Margaret M Foran, Director Buy, 1,000 $90.29 with an average share price of $90,290.00 View SEC Filing 12/4/2012 per share and the total transaction amounting to Avedick Baruyr Poladian.
Occidental Petroleum Corporation Risk Points versus Energy - CML News
Occidental Petroleum Corporation (OXY) Sets New 52-Week Low on Insider Selling - Chaffey Breeze
5 Reasons To Buy Occidental Petroleum Corporation Stock
Seeking Alpha - Jan 31, 2017
Occidental Petroleum stock is still at the same level as a year earlier, despite the ~50% increase in oil prices. But investors should take a closer look at this undervalued stock which also offers the highest dividend yield among all large-cap oil and ...
analysts Recommendations: Occidental Petroleum Corporation (NYSE:OXY) - News Oracle
Earnings Forecast Research on Occidental Petroleum Corporation (OXY) - Highland Mirror
Is Jim Cramer Right About Occidental Petroleum?
Seeking Alpha - Feb 13, 2017
Earlier this week, Jim Cramer, the host of CNBC's "Mad Money" and co-founder of TheStreet, said that investors should steer clear of Occidental Petroleum (NYSE:OXY) stock whose new CEO, Vicki Hollub has been "disastrous." However, I believe many ...
Occidental Petroleum Corporation (OXY) Moves Lower on Volume Spike for February 14 - Equities.com
Just the Facts on Occidental Petroleum Corporation (OXY) - StockNewsJournal
Occidental Petroleum (OXY) Q4 2016 Results - Earnings Call Transcript
Seeking Alpha - Feb 9, 2017
Additional information on factors that could cause results to differ is available on the company's most recent Form 10-K.
Occidental Petroleum (OXY) Q4 Loss Wider, Revenues Beat - Yahoo Finance
Occidental Petroleum Increases Production Sequentially - Wall Street Journal
Love Occidental's Asset Base, Hate Its Outspend
Seeking Alpha - Feb 15, 2017
Arguably an emerging oil major considering its growing upstream, midstream, and downside asset base, Occidental Petroleum Corporation (NYSE:OXY) had plenty to say when the firm posted its fourth-quarter earnings. Higher energy prices were warmly ...
Occidental Petroleum cuts Permian Basin costs by 25%
Seeking Alpha - Feb 9, 2017
OXY also reports nearly 190% reserve replacement in 2016 at a finding and development cost of $9.65/boe, and replaced 210% of Permian Basin production at a historically low finding and development cost of less than $9/boe.
Occidental Said to Be Seeking Buyer for South Texas Assets
Bloomberg - Feb 15, 2017
Occidental has been selling assets in South Texas as it focuses on growth in the Permian. The 180,000 acres being put up for sale now represent about 3 percent of the company's U.S. holdings. Most of the assets are in the Vicksburg shale, at least 500 ...
Today's Brokerage Rating: United Parcel Service, Inc. (UPS), Occidental ...
StockNewsJournal - Feb 23, 2017
Occidental Petroleum Corporation (NYSE:OXY), maintained return on investment for the last twelve months at -3.23, higher than what Reuters data shows regarding industry's average.
JC Penney, Occidental Petroleum Tumble into Friday's 52-Week Low Club
24/7 Wall St. - 23 hours ago
Occidental Petroleum Corp. (NYSE: OXY) dropped about 1.6% Friday, to post a new 52-week low of $64.19 after closing at $65.25 on Thursday.
Forward Earnings Estimate of Occidental Petroleum Corporation(OXY)
Highland Mirror - Feb 23, 2017
Occidental Petroleum Corporation(OXY): For the most recent quarter end, Occidental Petroleum Corporation reported Annual Earnings of $-0.13.
Occidental Petroleum Corporation (NYSE:OXY) has current Price to Earning Ratio ... - TopChronicle
Ruffer LLP Maintains Position in Occidental Petroleum Corporation (OXY) - Sports Perspectives
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for OXY to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate OXY's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$64.89 Current Price

$9.79 Growth Price (DCF)

Overvalued by 84.92%


Growth Rate Assumed by Market: 500.00%


Future Free Cash Flow Growth Rate: 1.1%


Discount Rate: 15.0%


OXY's most recent year of (normalized) free cash flow is negative. This is the base number for forward projections. This means that if you increase the growth rate, the amount of negative FCF grows, thereby decreasing the price.

Show Free Cash Flow numbers

$66.20 Book Price

Fairly valued


Poor Cash Return on Invested Capital over the past 5 years

OXY has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

OXY has only created $3.46 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 4.76B 1.09B 3.89B 2.68B -2.51B
divided by
Invested Capital 47.40B 55.33B 57.62B 44.23B 33.39B
Cash ROIC 10.05% 1.96% 6.75% 6.06% -7.53%

Poor Return on Equity over the past 5 years

OXY has shown an inability to deliver strong results for shareholders. This could be due to poor management, OXY operating in a highly competitive industry, or having a weak business in general.

OXY has only generated $2.57 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 6.77B 4.60B 5.90B 630.00M -7.83B
divided by
Stockholders' Equity 37.62B 40.02B 43.13B 34.96B 24.35B
Return on Equity 18.00% 11.49% 13.69% 1.80% -32.15%

Excellent Business Performance over the past 10 years

OXY has been able to maintain profitability in good times and bad. This could mean OXY has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

OXY has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 3.35B 1.92B 5.99B 2.23B 5.41B 4.76B 1.09B 3.89B 2.68B -2.51B

Good Balance Sheet

OXY's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Cash 1.58B 1.96B 2.79B 2.43B 3.48B 4.70B 1.59B 3.39B 3.79B 3.20B
Current Assets 6.01B 8.60B 7.17B 8.09B 13.06B 11.54B 9.49B 11.32B 13.87B 9.40B
Total Assets 32.36B 36.52B 41.54B 44.23B 52.43B 60.04B 64.21B 69.44B 56.26B 43.44B
Current Liabilities 4.72B 6.27B 6.13B 6.09B 7.83B 7.95B 7.29B 8.43B 8.24B 6.84B
Total Liabilities 13.17B 13.70B 14.24B 15.15B 19.95B 22.42B 24.19B 26.32B 21.30B 19.09B
Stockholder' Equity 19.18B 22.82B 27.30B 29.08B 32.48B 37.62B 40.02B 43.13B 34.96B 24.35B
Current Ratio 1.27 1.37 1.17 1.33 1.67 1.45 1.30 1.34 1.68 1.37
TL-to-TA 0.41 0.38 0.34 0.34 0.38 0.37 0.38 0.38 0.38 0.44

Consistent Reinvestment of Profits over the past 10 years

OXY has consistently retained profits. This may put OXY in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, OXY can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Retained Earnings 13.92B 18.82B 24.68B 26.53B 29.87B 35.14B 37.99B 41.83B 36.07B 25.96B
Retained Earnings Growth - 35.20% 31.17% 7.49% 12.57% 17.66% 8.10% 10.11% -13.78% -28.02%

Inconsistent Net Profit Margins over the past 10 years

OXY potentially has a competitive advantage, however inconsistent profit margins are a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$13.23 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 4.18B 5.40B 6.86B 2.97B 4.60B 6.77B 4.60B 5.90B 630.00M -7.83B
divided by
Revenue 18.16B 20.01B 24.48B 15.53B 19.16B 24.12B 24.25B 25.74B 21.95B 12.70B
Net Profit Margin 23.03% 26.98% 28.01% 19.10% 24.02% 28.07% 18.96% 22.94% 2.87% -61.65%

Strong Pricing Power over the past 10 years

OXY has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$69.34 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Gross Profit 11.58B 12.96B 17.06B 10.17B 13.05B 24.12B 16.41B 18.17B 15.14B 6.90B
divided by
Revenue 18.16B 20.01B 24.48B 15.53B 19.16B 24.12B 24.25B 25.74B 21.95B 12.70B
Gross Margin 63.77% 64.78% 69.68% 65.49% 68.10% 100.00% 67.66% 70.62% 69.00% 54.30%

High Capital Intensity over the past 10 years

OXY spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

250.50% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Capital Expenditure 3.01B 4.88B 4.66B 3.58B 3.94B 7.52B 10.23B 9.04B 8.39B 5.86B
divided by
Net Income 4.18B 5.40B 6.86B 2.97B 4.60B 6.77B 4.60B 5.90B 630.00M -7.83B
Capital Expenditure Ratio 71.86% 90.33% 68.02% 120.73% 85.61% 111.03% 222.40% 153.09% 1,331.43% -74.90%

Very Strong Dividend History over the past 10 years

OXY has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests OXY is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Dividend Paid 646.00M 765.00M 940.00M 1.08B 1.16B 1.56B 2.13B 1.55B 2.21B 2.26B
divided by
Shares Outstanding 860.49M 838.51M 820.80M 813.80M 813.80M 812.10M 810.00M 804.60M 781.10M 765.60M
Dividend Paid Per Share 0.75 0.91 1.15 1.33 1.42 1.92 2.63 1.93 2.83 2.96
Price at Year End 44.55 72.43 55.19 79.36 95.74 93.70 75.38 94.55 81.40 67.02
Dividend Yield 1.69% 1.26% 2.08% 1.67% 1.49% 2.05% 3.49% 2.04% 3.48% 4.41%

Strong History of Stock Buybacks over the past 10 years

OXY has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Shares Outstanding 860.49M 838.51M 820.80M 813.80M 813.80M 812.10M 810.00M 804.60M 781.10M 765.60M
Stock Bought Back - 2.62% 2.16% 0.86% - 0.21% 0.26% 0.67% 3.01% 2.02%
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Discussion
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0
Posted by divmon  (on June 9, 2012)
I'm on the fence about this one. Any thoughts?
1
Posted by pbanik  (on May 20, 2014)
@divmon I think it looks good right now.
Occidental Petroleum Corp OXY
http://quotes.morningstar.com/stock/crt/s?t=oxy
Morningstar rates the stock a buy. Of course, you might want to wait for a better entry point if you don't like the price now, but it's reasonably priced, compared to the industry average and the S&P500 as a whole.