Financial Contrast: Occidental Petroleum (OXY) vs. Anadarko Petroleum (APC)

Occidental Petroleum (NYSE: OXY) and Anadarko Petroleum (NYSE:APC) are both large-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.

Insider & Institutional Ownership

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82.7% of Occidental Petroleum shares are held by institutional investors. Comparatively, 88.0% of Anadarko Petroleum shares are held by institutional investors. 0.3% of Occidental Petroleum shares are held by company insiders. Comparatively, 0.5% of Anadarko Petroleum shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Occidental Petroleum and Anadarko Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Occidental Petroleum 9.88% 3.29% 1.63%
Anadarko Petroleum -3.83% -7.48% -2.47%

Dividends

Occidental Petroleum pays an annual dividend of $3.08 per share and has a dividend yield of 4.6%. Anadarko Petroleum pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. Occidental Petroleum pays out 346.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Anadarko Petroleum pays out -51.0% of its earnings in the form of a dividend. Occidental Petroleum has raised its dividend for 15 consecutive years. Occidental Petroleum is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Occidental Petroleum and Anadarko Petroleum, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Occidental Petroleum 1 13 4 0 2.17
Anadarko Petroleum 1 4 17 0 2.73

Occidental Petroleum presently has a consensus price target of $71.53, suggesting a potential upside of 5.93%. Anadarko Petroleum has a consensus price target of $67.39, suggesting a potential upside of 14.49%. Given Anadarko Petroleum’s stronger consensus rating and higher probable upside, analysts plainly believe Anadarko Petroleum is more favorable than Occidental Petroleum.

Volatility & Risk

Occidental Petroleum has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Anadarko Petroleum has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500.

Earnings & Valuation

This table compares Occidental Petroleum and Anadarko Petroleum’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Occidental Petroleum $13.27 billion 3.89 $1.31 billion $0.89 75.88
Anadarko Petroleum $11.91 billion 2.63 -$456.00 million ($1.96) -30.03

Occidental Petroleum has higher revenue and earnings than Anadarko Petroleum. Anadarko Petroleum is trading at a lower price-to-earnings ratio than Occidental Petroleum, indicating that it is currently the more affordable of the two stocks.

Summary

Occidental Petroleum beats Anadarko Petroleum on 10 of the 17 factors compared between the two stocks.

About Occidental Petroleum

Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. The company operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing. The Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas. The Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride; vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also trades around its assets consisting of transportation and storage capacity; operates a crude oil export terminal; and invests in entities. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.

About Anadarko Petroleum

Anadarko Petroleum Corporation engages in the exploration, development, production, and marketing of oil and gas properties. It operates through three segments: Exploration and Production, WES Midstream, and Other Midstream. The company explores for and produces oil, natural gas, and natural gas liquids (NGLs). It also engages in gathering, processing, treating, and transporting oil, natural-gas, and NGLs production, as well as the gathering and disposal of produced water. The company's oil and natural gas properties are located in the U.S. onshore, deepwater Gulf of Mexico; and Algeria, Ghana, Mozambique, Colombia, and other countries. As of December 31, 2017, it had approximately 1.4 billion barrels of oil equivalent of proved reserves. Anadarko Petroleum Corporation was founded in 1959 and is headquartered in The Woodlands, Texas.

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