Exploring Occidental Petroleum's ROE and Earnings Growth

Occidental Petroleum's stock has increased by 7.4% over the past three months. The company's return on equity (ROE) is 8.9%, which is lower than the industry average of 13%. However, the company has grown its net income at a significant rate of 48% in the last five years, and its growth is higher than the industry average of 37% in the same period. The efficient management and high earnings retention may be contributing factors to the company's earnings growth.

Occidental Petroleum (OXY) has experienced a notable uptick in its stock price, rising by 7.4% over the past three months. The company's recent performance has been driven by a combination of strategic acquisitions and robust operational efficiency. Despite a lower return on equity (ROE) compared to industry averages, Occidental has demonstrated strong earnings growth, with net income increasing by 48% over the past five years, outpacing the industry average of 37% [1].

The company's stock has outperformed the broader market, including the S&P 500, which experienced a daily loss of 0.33% on the most recent trading day [1]. Occidental's stock closed at $46.31, moving up by 1% from the previous trading session [1]. This performance is partially attributed to the company's focus on the Permian Basin and its significant international assets, which contribute significantly to production and cash flow [2].

Occidental's strategic acquisitions, such as the purchase of Anadarko Petroleum in 2019 and CrownRock L.P. in 2024, have bolstered production volumes and top-line performance [2]. Additionally, the company's international operations, including Qatar’s Dolphin gas project and Oman’s Mukhaizna oilfields, have played a pivotal role in driving growth and resilience [2].

The company's financial outlook remains promising, with analysts forecasting earnings of $0.33 per share for the upcoming release on August 6, 2025, despite a year-over-year decline of 67.96% [1]. The Zacks Consensus Estimates predict revenue to be $6.43 billion for the quarter, indicating a 6.46% decline compared to the prior year [1]. For the entire year, the Zacks Consensus Estimates forecast earnings of $2.26 per share and revenue of $26.55 billion, representing changes of -34.68% and -1.22%, respectively, compared to the previous year [1].

Occidental's stock is currently trading above its 50-day simple moving average (SMA), signaling a bullish trend [2]. The company's shares have outperformed another operator in the industry, ConocoPhillips (COP), which gained 11.6% in the past month [2]. This performance is a result of Occidental's low-cost, high-margin operations and its strong portfolio of high-quality assets located across various regions worldwide [2].

However, investors should be aware of potential headwinds, such as volatile commodity prices and declining earnings estimates. The Zacks Consensus Estimate for Occidental's 2025 and 2026 earnings per share has moved down 4.64% and 11.03%, respectively, in the past 60 days [2]. Despite these challenges, Occidental's focus on debt reduction, operational efficiency, and strategic capital investment positions it well for future growth.

In conclusion, Occidental Petroleum's stock performance has been driven by strategic acquisitions, robust operational efficiency, and strong earnings growth. While the company faces headwinds from volatile commodity prices and declining earnings estimates, its focus on debt reduction and international operations makes it a promising investment for the long term.

References:
[1] https://www.nasdaq.com/articles/occidental-petroleum-oxy-increases-despite-market-slip-heres-what-you-need-know
[2] https://www.nasdaq.com/articles/oxy-stock-trading-above-50-day-sma-time-buy-hold-or-sell