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Occidental Petroleum Corporation logo


What Today's Occidental Petroleum Upgrade Means for Mutual Fund Investors (OXY)

Shauna O'Brien Dec 15, 2014

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.”

Dividend Growth and Payout Ratio

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.

Mutual Funds to Watch

The Bottom Line

Shares of OXY are down 22% YTD.

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