According to Sterne Agee: “With a 3.9% yield, a balance sheet many integrateds would envy, and an active repurchase program, OXY shares are a compelling opportunity in today’s uncertain E&P landscape. Questions abound on when investors will come back into E&Ps, but we know one buyer of E&Ps – Occidental, which has a 76 million share repurchase program and just raised $8.55 billion (after tax). Proceeds bolster a pristine balance sheet, leading us to believe continued dividend growth is likely, despite the loss of CF from the CRC spin. Oil-related share price weakness could accelerate near-term share repurchases.”
Dividend Growth and Payout Ratio
As it stands now, the dividend payout ratio is currently 45.6%. The key thing to know here is that EPS will undoubtedly be lower, which means the current payout ratio will probably increase.
Mutual Funds to Watch
|Vanguard Total Stock Market Index
|Vanguard 500 Index
The Bottom Line
Shares of OXY are down 22% YTD.