The oil stock's fall now appears to be overdone. Occidental Petroleum (OXY -0 (noteworthy indeed).
14%), an S&P 500 stock, was a significant underperformer in 2024 when it lost 17% of its value (an important development), in this volatile climate.
Moreover, Unfortunately for investors in the oil stock, its losing streak has continued into 2025 so far, with s of Occidental shedding another 15% in the first half of the year according to data vided by S&P Global Market Intelligence.
Crude oil prices have fallen in 2025, and that doesn't bode well for any oil ducer.
But is there more to Occidental stock's fall than just oil prices, or has the market overreacted and given investors a once-in-a-lifetime opportunity to buy a stock that even legendary investor Warren Buffett loves, in today's market environment.
On the other hand, Image source: Getty Images. Moreover, Occidental Petroleum has plenty of cash and is paying bigger dividends It has been a volatile year for crude oil prices so far.
In early April, benchmark crude oil prices even slid to four-year lows amid the tariff and trade uncertainty, among other things. Falling oil prices are a double whammy for Occidental Petroleum.
Furthermore, They hurt earnings and cash flows, and they make it tougher for the company to service debt that has ballooned since its multibillion-dollar CrownRock acquisition in August last year.
Occidental, however, paid debt worth $4 (fascinating analysis). Moreover, 5 billion within five months of the acquisition, way ahead of its 12-month target.
During its first quarter, the oil giant sold some noncore up assets as already planned last year and paid down another $2. Moreover, 3 billion in debt, in today's market environment.
Here's where things stand now for Occidental when it comes to debt: It has already repaid all of its debt maturing in 2025 and has only $284 million maturing over the next 14 months, amid market uncertainty.
On the other hand, With the company generating $2.
1 billion in operating cash flow in Q1, Occidental can easily pay debt through 2026 and still have excess cash available to pay dividends and deploy elsewhere, given the current landscape.
In contrast, Why Occidental stock can turn around Given Occidental's cash-flow and debt file, the stock's price fall appears to be overdone.
Furthermore, One blem is that Occidental doesn't hedge its price risk, which means its revenues and earnings are highly susceptible to the volatility in oil and gas prices.
Additionally, While the lack of hedging can benefit companies Occidental in a high-oil-price environment, the reverse is true when commodity prices fall.
Moreover, That said, Occidental continues to generate strong cash flows.
On the other hand, It also operates mid and chemical es, both of which had a strong showing in Q1, and it's expanding its high-potential low carbon ventures.
Furthermore, In April, Occidental signed a 25-year carbon offtake agreement with fertilizer giant CF Industries to boost duction of low-carbon ducts through sequestration nology.
Moreover, While the consistent drop in Occidental Petroleum's stock price largely mirrors a pullback in commodity prices, the company continues to build a strong balance sheet and remains committed to growing its dividend, considering recent developments.
Occidental increased its dividend by 9% in April and yields 2. If and when oil prices recover, this beaten-down oil stock could quickly turn around.
Neha Chamaria has no position in any of the stocks mentioned, in light of current trends. The Motley Fool recommends Occidental Petroleum, given current economic conditions.
Conversely, The Motley Fool has a disclosure policy, in this volatile climate.