Sterne Agee has upgraded Occidental Petroleum from “Neutral” to “Buy.” The firm has also given the stock a $94 price target, which is based on the company’s dividend growth and share buybacks.

According to Sterne Agee: “With a 3.9% yield, a balance sheet many integrateds would envy, and an active repurchase program, OXY shares are a compelling opportunity in today’s uncertain E&P landscape. Questions abound on when investors will come back into E&Ps, but we know one buyer of E&Ps – Occidental, which has a 76 million share repurchase program and just raised $8.55 billion (after tax). Proceeds bolster a pristine balance sheet, leading us to believe continued dividend growth is likely, despite the loss of CF from the CRC spin. Oil-related share price weakness could accelerate near-term share repurchases.”

While the company has proven to be a solid dividend growth player, a slowdown in EPS growth due to lower oil prices will almost certainly have an impact on future dividend growth potential.

As it stands now, the dividend payout ratio is currently 45.6%. The key thing to know here is that EPS will undoubtedly be lower, which means the current payout ratio will probably increase.

For investors seeking a mutual fund investment with exposure to OXY, one of the funds below may be considered. These funds currently hold the largest stakes in OXY.

The funds above each own significant stakes in OXY. Investors interested in OXY may also be interested in Chevron (CVX) and Exxon (XOM).

Shares of OXY are down 22% YTD.