OXY  Occidental Petroleum Corporati...

Exchange

NYSE

Sector

Energy

Industry

Oil & Gas Production

Market Cap.

46.33B

Vuru Grade

25.50/100

Current Price

$60.59
-0.05 (-0.08%)

Growth Price

$32.08
Overvalued by 47.06%

Company Metrics

  • P/E 97.0041
  • P/S 4.24
  • P/B 2.20
  • EPS -0.70
  • Cash ROIC 1.77%
  • Cash Ratio 0.35
  • Dividend 3.04 / 5.01 %
  • Avg. Vol. 5.18M
  • Shares 764.65M
  • Market Cap. 46.33B

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

Occidental Petroleum upgraded at JP Morgan on valuation
Seeking Alpha - May 10, 2017
JPM analysts say "the concept that any E&P could achieve OXY's 5%-8% growth goal within post-dividend cash flows when its dividend is greater than 40% of CFO is hard for us to believe.
Occidental Petroleum shareholders pass climate change disclosure proposal - Pensions & Investments
Occidental Holders Override Board in Approving Climate Proposal - Bloomberg
Occidental Petroleum -2.5% as Q2 production outlook disappoints
Seeking Alpha - May 4, 2017
OXY says its global Q1 production fell 11% Y/Y to 584K boe/day from 657K boe/day and slightly below the 586K analyst consensus estimate; outlook in the Permian Basin, the focus of OXY's oil and gas operations - rose ~1% to 129K boe/day. OXY expects to ...
Oxy Execs Tout Analytics Skills in Squeezing Out Higher Production - Natural Gas Intelligence
Occidental Petroleum (OXY) Beats Q1 Earnings Estimates
Nasdaq - May 4, 2017
As of Mar 31, 2017, Occidental Petroleum had cash and cash equivalents of $1,494 million compared with $2,233 million as of Dec 31, 2016.
Occidental Petroleum (OXY) Q1 2017 Results - Earnings Call Transcript - Seeking Alpha
Occidental Petroleum (OXY) Tops Q1 Earnings, Lags Revenues - Yahoo Finance
Occidental Petroleum to Test a Massive Ship for US Oil Exports
Wall Street Journal (subscription) - May 10, 2017
Occidental Petroleum Corp. this month plans to test whether a massive supertanker named Anne can dock at its oil terminal along Texas' Corpus Christi Bay.
Occidental Petroleum to Test Supertankers in Texas -- Update - Fox Business
What are Analyst's Indicators for PPL Corporation (PPL), Occidental Petroleum ...
The USA Commerce - 22 hours ago
Shares of PPL Corporation (NYSE:PPL) surged 0.05% to $38.82. During the trading on 05/19/2017, Company's stock ranged from $38.94 to $38.51.
As Occidental Petroleum Corp (OXY) Stock Price Declined, Barrow Hanley ... - Finance News Daily
Occidental Petroleum Co. (OXY) Earns Buy Rating from Bank of America Corp - The Cerbat Gem
Occidental Petroleum Corporation (OXY) Has Revealed It All In Its Chart
NY Stock News - May 19, 2017
The technicals for Occidental Petroleum Corporation (OXY) have taken shape, and with them a comprehensive picture has emerged.
The Chart Is Speaking Loud And Clear For Occidental Petroleum Corporation (OXY)
NY Stock News - May 18, 2017
Occidental Petroleum Corporation (OXY) has been having a set of eventful trading activity and it is clear from an examination of the charts that traders are now fully aware of the company's key metrics.
Kitzinger Lautmann Capital Management Inc Buys Occidental Petroleum Corp ...
Nasdaq - May 9, 2017
Kitzinger Lautmann Capital Management Inc initiated holdings in Newell Brands Inc. The purchase prices were between $44.23 and $49.6, with an estimated average price of $47.43.
Stock Alert: Occidental Petroleum Corporation Stock Volatility Hits A ...
CML News - May 21, 2017
Before we cover the full analysis we make a quick alert here that Occidental Petroleum Corporation (NYSE:OXY) has seen its stock price move at a substantially lowered level.
Still A Value Trap? – PPL Corporation (PPL), Occidental Petroleum Corporation ...
USA Commerce Daily - 21 hours ago
Shares of PPL Corporation (NYSE:PPL) are on a recovery track as they have regained 23.74% since bottoming out at $32.08 on Oct. 07, 2016.
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.

$60.59 Current Price

$32.08 Growth Price (DCF)

Overvalued by 47.06%


Growth Rate Assumed by Market: 46.72%


Future Free Cash Flow Growth Rate: -4.1%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$57.93 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 $1.77 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 1.09B 3.89B 2.68B -2.51B 552.00M
divided by
Invested Capital 55.33B 57.62B 44.23B 33.39B 34.51B
Cash ROIC 1.96% 6.75% 6.06% -7.53% 1.60%

Very Poor Return on Equity over the past 5 years

OXY has shown an inability to deliver 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 generated a $1.57 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 4.60B 5.90B 630.00M -7.83B -574.00M
divided by
Stockholders' Equity 40.02B 43.13B 34.96B 24.35B 21.50B
Return on Equity 11.49% 13.69% 1.80% -32.15% -2.67%

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
2007200820092010201120122013201420152016
Free Cash Flow 1.92B 5.99B 2.23B 5.41B 4.76B 1.09B 3.89B 2.68B -2.51B 552.00M

Weak Balance Sheet

OXY's financial position is not ideal. The key is to check whether OXY is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 1.96B 2.79B 2.43B 3.48B 4.70B 1.59B 3.39B 3.79B 3.20B 2.23B
Current Assets 8.60B 7.17B 8.09B 13.06B 11.54B 9.49B 11.32B 13.87B 9.40B 8.43B
Total Assets 36.52B 41.54B 44.23B 52.43B 60.04B 64.21B 69.44B 56.26B 43.44B 43.11B
Current Liabilities 6.27B 6.13B 6.09B 7.83B 7.95B 7.29B 8.43B 8.24B 6.84B 6.36B
Total Liabilities 13.70B 14.24B 15.15B 19.95B 22.42B 24.19B 26.32B 21.30B 19.09B 21.61B
Stockholder' Equity 22.82B 27.30B 29.08B 32.48B 37.62B 40.02B 43.13B 34.96B 24.35B 21.50B
Current Ratio 1.37 1.17 1.33 1.67 1.45 1.30 1.34 1.68 1.37 1.32
TL-to-TA 0.38 0.34 0.34 0.38 0.37 0.38 0.38 0.38 0.44 0.50

Low or No Reinvestment of Profits over the past 10 years

OXY has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to OXY operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 18.82B 24.68B 26.53B 29.87B 35.14B 37.99B 41.83B 36.07B 25.96B 22.98B
Retained Earnings Growth - 31.17% 7.49% 12.57% 17.66% 8.10% 10.11% -13.78% -28.02% -11.48%

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.

$10.38 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 5.40B 6.86B 2.97B 4.60B 6.77B 4.60B 5.90B 630.00M -7.83B -574.00M
divided by
Revenue 20.01B 24.48B 15.53B 19.16B 24.12B 24.25B 25.74B 21.95B 12.70B 10.40B
Net Profit Margin 26.98% 28.01% 19.10% 24.02% 28.07% 18.96% 22.94% 2.87% -61.65% -5.52%

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.

$67.97 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
2007200820092010201120122013201420152016
Gross Profit 12.96B 17.06B 10.17B 13.05B 24.12B 16.41B 18.17B 15.14B 6.90B 5.21B
divided by
Revenue 20.01B 24.48B 15.53B 19.16B 24.12B 24.25B 25.74B 21.95B 12.70B 10.40B
Gross Margin 64.78% 69.68% 65.49% 68.10% 100.00% 67.66% 70.62% 69.00% 54.30% 50.10%

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.

272.83% 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
2007200820092010201120122013201420152016
Capital Expenditure 4.88B 4.66B 3.58B 3.94B 7.52B 10.23B 9.04B 8.39B 5.86B 2.83B
divided by
Net Income 5.40B 6.86B 2.97B 4.60B 6.77B 4.60B 5.90B 630.00M -7.83B -574.00M
Capital Expenditure Ratio 90.33% 68.02% 120.73% 85.61% 111.03% 222.40% 153.09% 1,331.43% -74.90% -493.21%

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
2007200820092010201120122013201420152016
Dividend Paid 765.00M 940.00M 1.08B 1.16B 1.56B 2.13B 1.55B 2.21B 2.26B 2.31B
divided by
Shares Outstanding 838.51M 820.80M 813.80M 813.80M 812.10M 810.00M 804.60M 781.10M 765.60M 763.80M
Dividend Paid Per Share 0.91 1.15 1.33 1.42 1.92 2.63 1.93 2.83 2.96 3.02
Price at Year End 72.43 55.19 79.36 95.74 93.70 75.38 94.55 81.40 67.02 71.23
Dividend Yield 1.26% 2.08% 1.67% 1.49% 2.05% 3.49% 2.04% 3.48% 4.41% 4.24%

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
2007200820092010201120122013201420152016
Shares Outstanding 838.51M 820.80M 813.80M 813.80M 812.10M 810.00M 804.60M 781.10M 765.60M 763.80M
Stock Bought Back - 2.16% 0.86% - 0.21% 0.26% 0.67% 3.01% 2.02% 0.24%
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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.