Occidental Petroleum Corporation Stock Buy Recommendation Reiterated (OXY)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Occidental Petroleum Corporation (NYSE: OXY) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 8.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OXY's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.07, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for OCCIDENTAL PETROLEUM CORP is rather high; currently it is at 59.79%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.54% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $3,561.00 million or 40.14% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.54%.

Occidental Petroleum Corporation engages in the exploration and production of oil and gas properties in the United States and internationally. The company operates in three segments: Oil and Gas; Chemical; and Midstream, Marketing and Other. Occidental has a market cap of $73.7 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 16.00, below the S&P 500 P/E ratio of 18.00. Shares are down 3.5% year to date as of the close of trading on Thursday.

You can view the full Occidental Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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