Chevron vs Occidental Petroleum Which Is a Better Investment?

Chevron Corporation and Occidental Petroleum Corporation are two of the largest players in the energy industry, both focusing on oil and gas exploration and production. Investors looking to capitalize on the energy sector may be considering these two stocks. While Chevron has a long-standing history of stable growth and strong dividends, Occidental has recently faced challenges due to its high debt levels and a decline in oil prices. Understanding the performance and potential of both companies is critical for investors seeking to make informed decisions in their portfolios.

Chevron or Occidental Petroleum?

When comparing Chevron and Occidental Petroleum, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Chevron and Occidental Petroleum.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Chevron has a dividend yield of 4.24%, while Occidental Petroleum has a dividend yield of 1.85%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Chevron reports a 5-year dividend growth of 6.16% year and a payout ratio of 70.19%. On the other hand, Occidental Petroleum reports a 5-year dividend growth of -25.32% year and a payout ratio of 31.93%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Chevron P/E ratio at 16.61 and Occidental Petroleum's P/E ratio at 10.09. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Chevron P/B ratio is 1.77 while Occidental Petroleum's P/B ratio is 1.27.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Chevron has seen a 5-year revenue growth of 0.25%, while Occidental Petroleum's is 0.36%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Chevron's ROE at 10.47% and Occidental Petroleum's ROE at 13.71%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $153.08 for Chevron and $47.43 for Occidental Petroleum. Over the past year, Chevron's prices ranged from $135.37 to $167.11, with a yearly change of 23.45%. Occidental Petroleum's prices fluctuated between $47.20 and $71.19, with a yearly change of 50.83%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.