Occidental Petroleum (OXY)
Energy · $56.0B market cap · SEC CIK 0000797468
ahead of 79% of the S&P 500 · #8 of 21 in Energy
Next reports on Feb 15, 2027, after the close, with analysts expecting $2.02 in earnings per share.
52-week range $38.80 to $67.45. 16% below its 52-week high and 47% above its low.
The case for OXY
- Cheap for its growth: 4.3× mid-cycle earnings, where 6%+ a year of growth plus a 1.2% dividend would justify about 19×.
- Generated $4.1B of free cash flow in FY2025, 19% of revenue.
- 38% of revenue drops through to net profit.
- Free cash flow of 7.3% of its market value a year: a lot of cash for the price.
- Revenue growing 16.6% year over year.
- Trades at 1.28× book value, close to what the balance sheet says it owns.
The case against
- Growth is weak (36/100): revenue +16.6%, +3.9% a year over five years.
- Long-term debt of $21.4B against $2.0B of cash.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Energy companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 78 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 36 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 84 |
| Momentumhow the price has behaved lately | 61 |
| Stabilityhow violently it moves, what it owes and what it pays you | 54 |
- Its profits follow commodity prices, so its earnings and margin are read as half the latest year and half the average of the years on file (5), and last year's change in earnings per share is not counted as growth.
- Each factor except momentum is half fixed thresholds, half rank among the 21 Energy companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +16.6% |
|---|---|
| Over 5 years | +3.9% a year |
| FY2025 revenue | $21.6B (−5%) |
Free cash flow
Is it generating real cash? Yes, plenty
| FY2025 free cash flow | $4.1B |
|---|---|
| Of revenue | 19% |
| Of profit | 173% |
Profit margins
Is profitability improving? Yes, improving
| Gross margin | 81% |
|---|---|
| Operating margin | 31% |
| Net margin, FY24 → FY25 → now | 13.6% → 11.0% → 38.1% |
Debt vs. cash
Is the balance sheet healthy? Yes, the debt is manageable
| Cash | $2.0B |
|---|---|
| Long-term debt | $21.4B |
| Net debt | $19.4B |
| Years to repay | 2.0 yrs |
Valuation
Is the stock price reasonable? Yes, it looks cheap
| P/E | 6.8× |
|---|---|
| P/E on mid-cycle earnings | 4.3× |
| Fair P/E for its growth | 19× |
| P/FCF | 13.6× |
| Forward P/E | 11.7× |
| EV / EBITDA | 4.7× |
Its profits follow commodity prices, so they are taken as half the latest year and half the average of recent years. At 4.3× those mid-cycle earnings (6.8× the latest year's) it trades well below the 19× that 6%+ a year of growth plus a 1.2% dividend would justify. At 13.6× free cash flow it trades below that same mark.
The financials, five years deep
Pulled from Occidental Petroleum's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $21.6B | $22.7B | $23.2B | $36.6B | $26.0B |
| Change on the year | −5% | −2% | −37% | +41% | — |
| Free cash flow | |||||
| Free cash flow | $4.1B | $5.2B | $6.6B | $12.3B | $7.6B |
| Of revenue | 19% | 23% | 28% | 34% | 29% |
| Profit margins | |||||
| Net margin | 11.0% | 13.6% | 20.2% | 36.3% | 8.9% |
| Debt vs. cash | |||||
| Cash | $2.0B | $2.1B | $1.4B | $984M | $2.8B |
| Long-term debt | $21.4B | $25.3B | $19.0B | $19.1B | $29.0B |
| Net cash (debt) | −$19.4B | −$23.2B | −$17.6B | −$18.2B | −$26.3B |
Risk factors OXY lists in its 10-K
- Anadarko’s Tronox settlement may not be deductible for income tax purposes and the Company may be required to repay the tax refund Anadarko received in 2016 related to the deduction of the Tronox settlement payment
- The Company’s indebtedness could limit financial flexibility and increase vulnerability to adverse conditions
- Government actions, regulatory changes and political, economic and social instability may adversely affect the Company’s operations and results of operations
- The Company may be adversely affected by claims, litigation, government investigations and other proceedings
- The Company is subject to operational hazards and catastrophic events
- Health, safety and environmental laws and regulations and climate-related policies could have a material adverse effect on the Company’s financial condition, results of operations and cash flows
- The Company’s carbon management and sustainability initiatives and strategic objectives involve significant risks and uncertainties
- The Company operates in highly competitive environments and may not be able to source production or replace reserves
- The Company’s oil and gas reserves and other significant financial statement items are estimates based on professional judgment and may be subject to revision
- The Company may experience delays, cost overruns, losses or unrealized expectations in development efforts and exploration activities
- The Company’s operations could be adversely affected if it is unable to source water or sand or dispose of surplus fluids
- EOR operations may decline if it is unable to obtain sufficient amounts of CO
- Acquisitions, divestitures and other transactions may cause financial results to differ from the Company’s or investors’ expectations, may not deliver anticipated benefits and could disrupt current operations
- An Occidental subsidiary acts as the general partner of WES, a publicly traded master limited partnership, which may involve potential legal liability
- The Company is exposed to cybersecurity, digital infrastructure and data security risks
- Insurance does not cover all risks, which could result in significant financial exposure