Occidental Petroleum (OXY)

Value trap or opportunity?

Key Statistics

EV/EBIT = 5.9x

ROE = 49.2%

Debt/Equity = 105%

FCF Yield = 17.86%

Dividend Yield = 1.22%

Market Capitalization = $52.55 billion

The Company

Occidental Petroleum (OXY) engages in oil exploration worldwide, with a strong focus on the United States, which generates 80% of their revenues. In addition to exploration, they are proficient in petrochemical manufacturing, offering a diverse range of chemicals derived from fossil fuel exploration.

The notable investment by Berkshire Hathaway in Oxy is the reason that I am looking into this stock.

Berkshire initially entered the picture when Oxy acquired Anadarko Petroleum in 2019, providing financing in exchange for preferred shares. Over the past year, Berkshire has significantly increased its position, accumulating a stake of 23.6% in the company as of Q1 2023. Given Berkshire's involvement, it is prudent to carefully evaluate the potential of Oxy as an investment opportunity.