Should You Pick Occidental Stock Over Its Competitors?

OXYYTD+40.3%SPYYTD+10.6%XLEYTD+41.1%
Analyze OXY →

For questions about this article or underlying research, email help@trefis.com.

Over its last four quarters, Occidental Petroleum (OXY) grew revenue faster than any of five oil and gas peers. Yet its stock trades at the lowest multiple of earnings in the group. Part of that low multiple comes from a single quarter in which profit ran far ahead of what Occidental’s operations earned. So how much less are you paying for Occidental than for a rival it outgrew?

Image from Pixabay

Occidental Grew Faster Than ConocoPhillips But Costs Less

Occidental trades at 6.9 times earnings, compared with 14.0 times for fellow oil and gas producer ConocoPhillips. One quarter lifts Occidental’s earnings, however: in fiscal Q1 2026, the company booked a $3.35 billion profit on $0.927 billion of operating income.

Measured on sales and operating profit instead, Occidental is still ahead. Its revenue grew 34.7% over its last four quarters, against 13.3% at ConocoPhillips. It also kept 29.3% of its sales as operating profit, against 24.7% at ConocoPhillips, so you would be paying less for a company that grew faster and earned a wider margin. Set against operating profit instead of earnings, Occidental’s $57.0 billion market value is about 7.8 times its $7.32 billion of operating profit over those four quarters. ConocoPhillips’ $162 billion is about 9.6 times its $16.8 billion. On the same measure, EOG Resources ($78.5 billion against $10.9 billion) and Diamondback Energy ($49.9 billion against $7.4 billion) cost less than Occidental.

Among the group of six, Occidental ranks first on revenue growth and third on operating margin, trailing EOG Resources and Diamondback Energy. Yet its stock return over the past year ranks only fifth, placing it ahead of Diamondback Energy alone.

OXY CVX XOM COP EOG FANG
Four Fiscal Quarters ended 2026-09-30 (Q4 FY2025 to Q3 FY2026) ended 2026-09-30 (Q4 FY2025 to Q3 FY2026) ended 2026-09-30 (Q4 FY2025 to Q3 FY2026) ended 2026-09-30 (Q4 FY2025 to Q3 FY2026) ended 2026-09-30 (Q4 FY2025 to Q3 FY2026) ended 2026-09-30 (Q4 FY2025 to Q3 FY2026)
Market Value (USD billion) 57 413 681 162 78.5 49.9
P/E 6.9 15.3 16.8 14 9.6 24.3 (not in the P/E rank)
Revenue Growth 34.7% 20.8% 19.5% 13.3% 28.8% 20.8%
Operating Margin 29.3% 14.6% 12.4% 24.7% 37.4% 40.1%
Total Return, Incl. Dividends, 2025-11-07 to 2026-11-10 40.5% 41.6% 44.4% 61.1% 48.3% 27%
Data as of 11/10/2026. Revenue growth, operating margin and the net income in the P/E are for each company’s four fiscal quarters in the first row; revenue growth is against the four quarters before. A P/E marked “not in the P/E rank” belongs to a company whose net income was below zero in at least one of those four quarters.

Is Occidental’s Growth A Rebound From Falling Sales?

Occidental’s fast growth is measured against a low base. In our data, its revenue for the quarter ended December 2024 was $2.05 billion, far below the $7.17 billion and $5.70 billion of the quarters on either side, so the 34.7% growth figure may overstate the rebound. Twelve-month revenue fell in each of the years to September 2023, 2024 and 2025, ending that run at $18.5 billion. This was down from $36.3 billion in the year to September 2022. The latest four quarters brought revenue back to $25.0 billion, still short of that 2022 level.

Occidental earns almost all of its revenue from oil and gas. In fiscal 2025, its oil and gas segment had $20.9 billion of revenue, against $1.28 billion for midstream and marketing. That fiscal year ended in December 2025, three months after the twelve months to September 2025.

The recovery held in the latest quarter, when revenue rose 19.0% from a year earlier. Management said its U.S. onshore wells beat the midpoint of its own production forecast, more than making up for lower output in the Gulf of America and abroad.

How Does Occidental Plan To Use Its Cash?

Occidental plans to pay down debt rather than produce more. On the November 10, 2026 call, management said it expects 2027 production to be relatively flat compared with 2026, on capital spending of about $5.9 billion.

Total debt was $12.6 billion at the end of September 2026, against $22.9 billion a year earlier. In the third quarter, management said principal debt reached its earlier $10 billion goal. Management has set a new goal of $6 billion of principal debt. At that level, it expects interest expense of about $400 million a year, roughly $1 billion less than in 2025.

The risk for a holder comes from commodity prices. Management credited higher commodity prices, along with cost discipline, for the free cash flow Occidental generated in the third quarter. With output planned flat, Occidental’s sales growth now rests more on those prices.

For Occidental to earn a place above its rivals, it has to keep growing sales while putting its spare cash toward paying down debt rather than producing more output. So far it has: revenue in the latest quarter was still up from a year earlier. Occidental’s revenue growth against a year earlier is the measure to watch when it reports in February 2027.

Not Sure Occidental Petroleum Is Worth It At This Price?

You don’t have to bet on one stock to earn. The Trefis Income Solution owns 50 dividend stocks that yield about 3x the S&P 500, each with at least 10 straight years of dividends.

See If It Fits Your Plan

Spot an error or want more like this? Tell us in 10 seconds.