Occidental
Petroleum produces and markets crude oil and natural gas, manufactures
industrial chemicals, plastics and fertilizer and transports natural gas through
pipelines. The company has grown profits and dividends at a 14-15% over the
last ten years. OXY’s return on equity has been in the 11-20% range. The
company should continue to grow dividends and earnings as a result of:
(1) rising
production from new properties,
(2) divesting non-core
assets,
(3)
acquisitions,
(4)
stock buyback program.
Negatives:
(1) OXY earnings are very levered to the price of crude
oil,
(2) political
instability remains a major threat to earnings,
(3) highly
competitive industry.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Ind Ave 2.6 9 28 NA
Debt/ EPS Down Net Value Line
Equity ROE Since 2004 Margin Rating
Ind Ave 21 18 NA 7 NA
Chart
Note:
OXY stock made initial good progress off its September 2008 low, quickly
surpassing the downtrend off its May 2008 high (straight red line) and the
November 2008 trading high (green line).
Long term, it is in a trading range (blue lines). Intermediate term, it is in a trading range
(purple line is lower boundary). The
wiggly red line is the 50 day moving average.
The Dividend Growth Portfolio owns a 75% position in OXY. The upper boundary of its Buy Value Range is
$72; the lower boundary of its Sell Half Range is $166.
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