Contrasting Newfield Exploration (NFX) and Occidental Petroleum (OXY)

Occidental Petroleum (NYSE: OXY) and Newfield Exploration (NYSE:NFX) are both mid-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Insider and Institutional Ownership

80.3% of Occidental Petroleum shares are owned by institutional investors. Comparatively, 99.8% of Newfield Exploration shares are owned by institutional investors. 0.3% of Occidental Petroleum shares are owned by insiders. Comparatively, 0.5% of Newfield Exploration shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Occidental Petroleum and Newfield Exploration, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Occidental Petroleum 2 9 7 0 2.28
Newfield Exploration 1 7 16 0 2.63

Occidental Petroleum currently has a consensus target price of $67.27, suggesting a potential downside of 3.90%. Newfield Exploration has a consensus target price of $38.95, suggesting a potential upside of 27.45%. Given Newfield Exploration’s stronger consensus rating and higher probable upside, analysts plainly believe Newfield Exploration is more favorable than Occidental Petroleum.

Dividends

Occidental Petroleum pays an annual dividend of $3.08 per share and has a dividend yield of 4.4%. Newfield Exploration does not pay a dividend. Occidental Petroleum pays out 440.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Occidental Petroleum has increased its dividend for 14 consecutive years.

Risk & Volatility

Occidental Petroleum has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Newfield Exploration has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500.

Earnings and Valuation

This table compares Occidental Petroleum and Newfield Exploration’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Occidental Petroleum $10.40 billion 5.15 -$574.00 million $0.70 100.00
Newfield Exploration $1.47 billion 4.14 -$1.23 billion $1.73 17.66

Occidental Petroleum has higher revenue and earnings than Newfield Exploration. Newfield Exploration is trading at a lower price-to-earnings ratio than Occidental Petroleum, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Occidental Petroleum and Newfield Exploration’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Occidental Petroleum 4.33% 1.31% 0.65%
Newfield Exploration 20.62% 35.28% 8.89%

Summary

Newfield Exploration beats Occidental Petroleum on 11 of the 17 factors compared between the two stocks.

About Occidental Petroleum

Occidental Petroleum Corporation (Occidental) is an oil and gas exploration and production company. The Company operates through three segments: oil and gas, chemical (OxyChem), and midstream and marketing. The oil and gas segment explores for, develops and produces oil and condensate, natural gas liquids (NGLs) and natural gas. The OxyChem segment manufactures and markets basic chemicals and vinyls. The midstream and marketing segment gathers, processes, transports, stores, purchases and markets oil, condensate, NGLs, natural gas, carbon dioxide (CO2) and power. The Company also trades around its assets, including transportation and storage capacity. Additionally, the midstream and marketing segment invests in entities that conduct similar activities. Occidental’s domestic upstream oil and gas operations are located in New Mexico and Texas. Its international operations are located in Bolivia, Colombia, Oman, Qatar and the United Arab Emirates (UAE).

About Newfield Exploration

Newfield Exploration Company is an independent exploration and production company. It is engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. Its operating segments are the United States and China. Its the United States operations are onshore and focus primarily on large scale, liquids resource plays. Its principal areas of operation are the Anadarko and Arkoma basins of Oklahoma, the Williston Basin of North Dakota and the Uinta Basin of Utah. It has oil producing assets offshore China. As of December 31, 2016, its proved reserves of 513 million barrels of oil equivalents (MMBOE) consisted of 304 MMBOE proved developed producing, 10 MMBOE proved developed non-producing and 199 MMBOE proved undeveloped reserves. As of December 31, 2016, its proved liquids reserves were 285 million barrels of crude oil or other liquid hydrocarbons. As of December 31, 2016, 67% of its proved liquids reserves were crude oil or condensate.

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