Large-cap oil exploration and production company Occidental Petroleum (OXY) is putting in an impressive start for 2012. Already, shares have rallied more than 11% this year, and the firm's 17.4% dividend hike yesterday should help to put more distance between OXY's returns and breakeven. The hike puts Occidental's payout at a quarterly 54 cents per share - that's a 2.07% yield at current prices.
Occidental produces approximately three-quarters of a million barrels of oil each day, production that leaves the firm well shy of the supermajors but puts OXY in excellent position with oil prices skirting triple-digit levels this month. Scale isn't a huge advantage in the oil business -- instead, the cost of pulling crude out of the ground is the key factor that sets a firm apart. Occidental's costs are reasonably low, and stand to potentially get even lower if current exploration efforts pan out as analysts expect.Meanwhile, with renewed tension in the Middle East threatening a spike in oil prices, natural gas exposure could meaningfully buoy share prices for OXY this year as consumers start substituting one fuel source for another. With a bulletproof balance sheet and deep net margins, investors should expect OXY to continue hiking its yield going forward. Occidental, one of TheStreet Ratings' top-rated oil and gas stocks, shows up on a list of 5 Oil & Gas Stocks Headed Higher in 2012.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV