Top 5 Oil and Gas Stocks to Invest In

3. Occidental Petroleum Corporation (NYSE:OXY)

Number of Hedge Fund Holders: 67

The third pick in the top oil and gas stocks to invest in is Occidental Petroleum Corporation (NYSE:OXY). It is an American hydrocarbon explorer operating primarily in the United States, Middle-East and Colombia. The company has 3 billion barrels of oil equivalent of proven reserves at its disposal in 2022. The reserves make up 51% in petroleum and 30% in natural gas. 

The company’s next quarterly dividend payout of $0.13 per share is set to be paid to shareholders on July 15. Occidental does not yet have a history of consecutively growing its payouts. However, its payout ratio is highly sustainable at almost 8% which does raise the likelihood of the company establishing a good record of consecutive dividend-growing in the future.

Occidental Petroleum has a lower-than-industry-average P/E ratio of 9 and boasts a 47% Return on Equity as of the first quarter of 2022. The company massively beat consensus by nearly half a billion dollars in its Q1 results, with a revenue of $8.5 billion. Its earnings earnings by $0.09 and had an EPS of $2.12.

On June 27, Occidental Petroleum disclosed in a regulatory filing that Berkshire Hathaway, the fund managed by Warren Buffett, had increased its stake in the company by $44 million. On May 31, Mizuho analyst Vincent Lovaglio raised the price target on Occidental Petroleum to $89 from $85 and kept a Buy rating on the stock.

Smead Capital Management highlighted Occidental Petroleum in a broader note on oil stocks in their Q3 2021 investor letter. Here’s what they said: 

“Oil stocks dominated our winners for the quarter. We showed that we have unlimited ability to tempt fate by buying into Occidental Petroleum (OXY) this year after it was our biggest loser of 2020. It gained 16.64% during the third quarter.”