Occidental Petroleum (OXY) Stock: Divestiture Fuels Dividend Speculation

Occidental finalized the $9.7 billion sale of its chemical business to focus on core oil operations according to company announcement. Traders show unusual call option activity anticipating a potential dividend increase. Institutional investors control 51% of shares with Berkshire holding 27% as reported. Valuation models present conflicting signals about OXY stock's current pricing according to analysis.

Occidental Petroleum (OXY) stock investors face contrasting signals after transformative corporate actions. The company cemented its $9.7 billion divestiture to Berkshire Hathaway, strengthening its balance sheet substantially. Meanwhile, options traders position aggressively for a potential dividend boost, anticipating significant share price appreciation. These developments occur against mixed technical indicators and strong institutional ownership as noted. Market participants now weigh strategic clarity against lingering financial concerns.

How Did Occidental's $9.7 Billion Divestiture Impact OXY Stock?

Occidental completed its OxyChem chemical business sale to Berkshire Hathaway for $9.7 billion cash per company announcement. This transaction aligns with Occidental's strategy to concentrate on oil and gas operations while improving financial flexibility. Proceeds will primarily target debt reduction and future initiatives according to corporate filings. The deal transferred operational assets but excluded certain environmental liabilities retained by an Occidental subsidiary as detailed. This strategic streamlining positions Occidental for focused energy portfolio development according to SEC filing.

Market reaction has been muted despite the substantial capital infusion into Occidental according to market analysis. Shares recently declined $1.10 amid bearish sentiment and unusual options volume as reported. The divestiture simplifies Occidental's corporate structure but doesn't immediately resolve all financial concerns according to SEC filing. Investors continue monitoring debt metrics and execution of stated carbon management objectives as per company announcement. This transaction represents a pivotal step in Occidental's operational repositioning journey.

Why Are Traders Betting on a Dividend Hike for OXY Stock?

Unusual activity emerged in January 2026 OXY call options with over 39,000 contracts traded according to financial data. This surge represents 130 times normal volume as investors anticipate a possible dividend increase. Traders project that raising the dividend to $1.00 per share could justify a $50 stock price based on yield assumptions as calculated. Such movement implies a 20.6% upside from recent $41.46 levels according to analysis. This aggressive positioning suggests strong conviction about near-term capital returns.

These bullish bets face substantial risk as the call options remain out-of-the-money currently as noted. Bears point to the elevated put/call ratio of 0.38 signaling downside concerns according to technical analysis. Implied volatility increased to 29.5 reflecting expected daily swings of $0.77 according to options data. While some propose hedging with put sales, the Altman Z-Score of 1.39 indicates financial vulnerability as reported. Market technicals present conflicting signals about OXY stock's trajectory despite dividend optimism.

What Does Institutional Ownership Reveal About OXY Stock's Future?

Institutions control 51% of Occidental shares with Berkshire Hathaway dominating at 27% ownership according to ownership data. This concentrated stake creates potential influence over corporate decisions and stock performance as observed. The $2.5 billion market cap rebound following recent declines particularly impacts these major stakeholders according to market analysis. Such institutional weight provides credibility but increases volatility risks during sector rotations as noted. Ownership concentration remains a critical factor for retail investors evaluating OXY stock.

Valuation models present opposing perspectives on Occidental's current price according to analysis. A discounted cash flow analysis suggests shares could be undervalued by 59.8% with a $105.31 intrinsic value as calculated. Conversely, the forward P/E ratio of 28.6x appears expensive relative to industry peers according to valuation data. Occidental outperformed the market by 2.95% annually over five years according to performance data. Its diverse global operations produced 1.327 million barrels daily with proved reserves near 4 billion barrels as reported. These fundamentals underpin analysts' $49.59 average price target according to market research.