OXY - How Occidental Petroleum Stock Could Be a Big Winner
Though its stock price hasn't fully recovered, Occidental Petroleum (NYSE: OXY) is a well run company that could see sizable upside ahead if oil prices remain elevated. In this clip from "The Rank" on Motley Fool Live , recorded on April 25 , Motley Fool contributors Jason Hall, John Bromels, and Matt Frankel discuss how they ranked the oil and gas company.
Jason Hall: This is one of the smaller U.S.-based integrated oil and gas majors. It doesn't do everything to the same scale as the Chevron s (NYSE: CVX) of the world do, but it does have a relatively integrated business with the petrochemicals business, some pipelines business, oil and gas exploration, and production. So, how did this end up in the Berkshire (NYSE: BRK.A) (NYSE: BRK.B) portfolio? Two ways. I think it started out when Oxy was acquiring Anadarko Petroleum (NYSE: APC) , and it got into a price war to buy Anadarko. And the price got kind of bananas, to the point where essentially everybody in the oil and gas industry was panning it as a massive overpay. And as Buffett is one to do, sometimes those things happen. Companies need money, and Buffett has money. And having Buffett's name attached to it sometimes is worth paying a very high premium to get it. So as part of the deal, there were warrants. It was preferred stock, plus warrants for Oxy's shares. The preferred stock pays a very high dividend yield, and the warrants, I believe, still have not been. I don't think they've been converted.
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How Occidental Petroleum Stock Could Be a Big Winner