Stock Analysis & Valuation Occidental Petroleum Corporation (OPC.DE)

• Previous Close: €38.19
• Sector Valuation Confidence Level: Low

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	39.50	3
Intrinsic value (DCF)	22.32	-42
Graham-Dodd Method	25.70	-33
Graham Formula	8.60	-77

Strategic Investment Analysis

Company Overview

Occidental Petroleum Corporation (OPC.DE) is a leading global energy company engaged in the exploration, production, and marketing of oil, natural gas, and petrochemicals. Headquartered in Houston, Texas, Occidental operates across three core segments: Oil and Gas, Chemical, and Midstream and Marketing. The company has a diversified portfolio spanning the United States, the Middle East, Africa, and Latin America, leveraging advanced extraction technologies and carbon management initiatives. Occidental is particularly notable for its investments in carbon capture and storage (CCS) through its Oxy Low Carbon Ventures division, positioning it as a forward-thinking player in the energy transition. With a market capitalization of approximately €35.6 billion, Occidental remains a key player in the oil and gas sector, balancing traditional hydrocarbon production with sustainability-focused innovations. Its vertically integrated operations—from upstream exploration to downstream chemicals—enhance efficiency and resilience in volatile energy markets.

Investment Summary

Occidental Petroleum presents a mixed investment case. On the positive side, its diversified operations, strong cash flow generation (€11.4 billion operating cash flow in the latest period), and strategic focus on carbon management provide stability and long-term growth potential. The company’s dividend yield (~2.4%) and share buybacks add shareholder appeal. However, high total debt (€27.1 billion) and exposure to oil price volatility remain key risks. Occidental’s beta of 0.81 suggests moderate sensitivity to market swings, but its heavy reliance on fossil fuels could face regulatory and ESG-related headwinds. Investors should weigh its technological leadership in CCS against cyclical energy sector challenges.

Competitive Analysis

Occidental Petroleum competes in a highly capital-intensive industry dominated by integrated oil majors and independent E&P firms. Its competitive advantage lies in its geographic diversification, low-cost Permian Basin operations, and pioneering carbon capture initiatives, which differentiate it from peers. The company’s chemical segment provides downstream integration, reducing reliance on pure commodity price exposure. However, Occidental’s debt load is higher than some competitors, limiting financial flexibility. Its midstream and marketing segment enhances margin stability but lacks the scale of dedicated midstream giants. Occidental’s CCS investments, including the DAC (direct air capture) projects, position it as a sustainability leader, though profitability in this niche remains unproven. Compared to supermajors like Exxon and Chevron, Occidental has a narrower upstream focus but greater agility in adopting emerging technologies. Its Permian Basin assets are a key strength, though competition there is intense.

Major Competitors

• Exxon Mobil Corporation (XOM): Exxon Mobil is the largest publicly traded oil major, with unparalleled scale and integrated operations. Its strengths include a robust balance sheet, global refining network, and LNG leadership. However, it lags Occidental in carbon innovation and Permian Basin efficiency. Exxon’s dividend reliability is a key advantage.
• Chevron Corporation (CVX): Chevron combines upstream prowess with a strong LNG portfolio and lower breakeven costs than Occidental. Its financial discipline and low debt are strengths, but its Permian footprint is less concentrated than Occidental’s. Chevron’s renewable investments are growing but trail Occidental’s CCS focus.
• ConocoPhillips (COP): ConocoPhillips is a leaner independent E&P with a low-cost structure and strong free cash flow. It lacks Occidental’s chemical and midstream diversification but outperforms in capital efficiency. Its Alaska and LNG assets provide balance, though it has no equivalent to Occidental’s carbon initiatives.
• Equinor ASA (EQNR.OL): Equinor leads in offshore wind and European decarbonization, contrasting with Occidental’s US-centric oil focus. Its state backing ensures stability, but its renewables push comes at lower margins than Occidental’s core oil business. Equinor’s carbon footprint is lighter due to gas dominance.
• BP plc (BP): BP is aggressively pivoting to renewables, sacrificing near-term oil growth. Its diversified energy portfolio and European market presence differ from Occidental’s US-heavy operations. BP’s weaker cash flow from legacy assets contrasts with Occidental’s Permian-driven profitability.