Occidental Petroleum (OXY) - investment and dividend analysis

Occidental Petroleum (OXY) is an independent exploration and production company with operations in the United States, Latin America and the Middle East. At the end of 2023, the company reported net proven reserves of almost 4 billion barrels of oil equivalent. Net production in 2023 averaged 1,234 thousand barrels of oil equivalent per day, with a mix of approximately 50% oil and natural gas and 50% natural gas.

A look at Occidental Petroleum Corp.'s dividend history.

Occidental Petroleum Corp has consistently paid dividends since 1985. Currently, dividends are distributed quarterly. Below is a chart showing annual dividends per share to track historical trends.

Analysis of dividend yield and growth of Occidental Petroleum Corp.

Occidental Petroleum Corp currently has a 12-month trailing dividend yield of 1.28% and a 12-month forward dividend yield of 1.48%. This suggests an increase in dividend payments over the next 12 months.

Over the past three years, Occidental Petroleum Corp's annual dividend growth rate has been -4.20%. When extended over a five-year horizon, this figure dropped to -36.20% per year. And over the past decade, Occidental Petroleum Corp's annual dividend per share growth rate has been -23.00%.

Based on Occidental Petroleum Corp's dividend yield and 5-year growth rate, Occidental Petroleum Corp's 5-year share price yield is currently approximately 0.14%.

Sustainability Issue: Payout Ratio and Profitability

To assess dividend sustainability, you need to evaluate a company's payout ratio. The dividend payout ratio gives an idea of ​​how much of a company's profits it distributes as dividends. A lower ratio suggests that the company is retaining a significant portion of its profits, thereby ensuring it has funds available for future growth and unexpected downturns. As of March 31, 2024, Occidental Petroleum Corp's dividend payout ratio is 0.25.

Western Oil Corporation profitability rating gives an understanding of the company's income level in comparison with its peers. GuruFocus rates Occidental Petroleum Corp's profitability as 6 out of 10 as of March 31, 2024, implying fair profitability. The company has reported net income in 6 of the last 10 years.

Growth indicators: future prospects

To ensure dividend sustainability, a company must have a solid growth track record. Western Oil Corporation's growth rating of 6 out of 10 suggests the company has good growth prospects.

Earnings are the lifeblood of any company, and Occidental Petroleum Corp.'s EPS, when combined with its 3-year revenue growth rate, indicates a strong earnings model. Occidental Petroleum Corp's revenue grew at an average annual rate of approximately 14.90%, which is lower than approximately 54.56% of its global peers.

Who has already bought Occidental Petroleum Corp. and final thoughts. 

Despite challenging historical dividend growth rates, Occidental Petroleum Corp maintains a strategic approach to dividend distribution, supported by a moderate payout ratio and fair profitability. Investors should consider these factors, along with a company's growth prospects, when assessing the future sustainability of the dividend.