Long-established in the Oil & Gas industry, Occidental Petroleum Corp (OXY, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 0.88%, juxtaposed with a three-month change of -8.01%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Occidental Petroleum Corp.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 6/10
- Growth rank: 4/10
- GF Value rank: 9/10
- Momentum rank: 2/10
Based on the above method, GuruFocus assigned Occidental Petroleum Corp the GF Score of 69 out of 100, which signals poor future outperformance potential.
Understanding Occidental Petroleum Corp Business
Occidental Petroleum Corp 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 proved reserves of nearly 4 billion barrels of oil equivalent. Net production averaged 1,234 thousand barrels of oil equivalent per day in 2023 at a ratio of roughly 50% oil and natural gas liquids and 50% natural gas. With a market cap of $44.5 billion and sales amounting to $27.1 billion, Occidental Petroleum Corp maintains an operating margin of 21.11%. Despite its significant presence in the industry, the company's current financial metrics suggest potential challenges ahead.
Financial Strength Breakdown
Occidental Petroleum Corp's financial strength indicators present some concerning insights about the company's balance sheet health. The company's Altman Z-Score is just 1.47, which is below the distress zone of 1.81. This suggests that the company may face financial distress over the next few years. Additionally, the company's low cash-to-debt ratio at 0.06 indicates a struggle in handling existing debt levels.
Growth Prospects
A lack of significant growth is another area where Occidental Petroleum Corp seems to falter, as evidenced by the company's low Growth rank. Lastly, Occidental Petroleum Corp's predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Next Steps
Occidental Petroleum Corp's financial strength, profitability, and growth metrics, as highlighted by the GF Score, underscore the firm's potential for underperformance. While the company has a strong historical presence in the oil and gas sector, its current financial indicators suggest challenges that may hinder future growth. Investors should consider these factors when evaluating the company's potential for long-term success. For those seeking companies with stronger GF Scores, GuruFocus Premium members can explore more options using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
