Warren Buffett increases his Occidental Petroleum stake: Does it have potential?

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Warren Buffett increases his Occidental Petroleum stake: Does it have potential?
Credit: © Reuters.

Investing.com - Warren Buffett continues to show his preference for the oil sector. Last week, just after the earnings release of Occidental Petroleum (NYSE: OXY ), Buffett's conglomerate, Berkshire Hathaway (NYSE: BRKa ), increased its stake in the company to 24.4%.

Buffett took advantage of that earnings presentation, which was worse than the market expected, sending the stock down. Buffett bought cheaper. He paid about $201 million for 3.46M shares of Occidental between May 16 and 18. Buffett's purchases helped raise the share price or at least stabilize it. That week, they rose almost 2%.

He now owns around 217.3M (NYSE: MMM ) shares of Occidental worth about $12.7 billion.

Buffett began buying Occidental shares in 2022 and has gradually increased his stake.

According to the professional tool InvestingPro, Occidental Petroleum has an average fair value of 66.70, its risk is medium, and its financial health shows favorable performance.

Source: InvestingPro

The company has in its favor that the management has aggressively repurchased shares, strong earnings should allow management to continue paying dividends, and cash flows can adequately cover interest payments.

OXY

Source: InvestingPro

After worse-than-expected Q1 2023 results, all eyes are on the next report. The company will release its Q2 2023 results on August 1.

Analysts have lowered their earnings per share (EPS) expectations for this quarter by -42.1% from $1.87 per share to $1.09 per share over the past 12 months, according to InvestingPro data.

OXY

Source: InvestingPro

Occidental announced on May 4 that the board declared a regular quarterly dividend of $0.18 per share. Shares must be purchased before the ex-dividend date of June 8 and will receive payment on July 14.

OXY

Source: InvestingPro

Want to learn more about the company and its investment potential? Request your free 7-day InvestingPro trial now.

(Translated from Spanish)

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