The oil stocks have fallen following Israel’s attack on four Iranian soldiers at the weekend.
Investors worried about geopolitical instabilities and their impact on oil prices pushed Occidental Petroleum Corp. (NYSE: OXY), down to $50.
Since early April, shares of this hydrocarbon exploration firm have lost over 25%.
Has it yet reached a bottom? Now is a good time to start building a position on Occidental? Let’s explore.
OXY is reducing its debt
Occidental Petroleum is a good choice for writing, as the company’s stock price has historically risen during wartime.
Occidental Petroleum, in the year 2022 when Russia began a military operation against Ukraine, reported profits record that were used to reduce its debts by a staggering $10 billion.
The Houston-headquartered firm continued to strengthen its balance sheet this year, reducing another $3.0 billion in debt.
OXY’s debt has been successfully reduced by 60% over the past few years.
After the recent sell-off of Occidental shares, this is the main reason why you should consider investing in Occidental.
The oil giant’s shares are poised for a healthy return on investment, as they also pay out a dividend.
Wall Street sees Occidental Petroleum’s shares rising to an average of $65 per share, which indicates a 30% potential increase from this point.
Invest in Occidental Stock for its DAC Investments
Occidental’s investment in Direct-Air-Capture (DAC), a technology that captures air directly, is a good reason to buy shares.
This New York-listed firm can remove CO2 from the atmosphere by capturing it and then storing in underground.
The direct-air-capture (DAC) technology is a growing interest among tech giants who are looking for new ways to meet their commitments to be carbon neutral.
1PointFive, earlier this year announced that it had signed a contract with Microsoft “to sell 500,000 metric tonnes of CO2 removal credits over a period of six years.”
OXY believes that carbon capture, utilization and sequestration will eventually become a market worth $3-5 trillion.
The company expects that eventually it will start to generate as much income from this sector as they do from the oil and gas industry.
Occidental is also worth considering, as legendary investor Warren Buffett has placed a large bet on the stock.
Berkshire Hathaway, the conglomerate owned by Warren Buffett, has increased its holdings in energy companies despite the weakness experienced over the last six months.
Berkshire owns a total of 255,000,000 shares in Occidental Petroleum, making it the company’s sixth largest holding.
The post Occidental at $50: Why it’s a No-Brainer Buy may change as new information becomes available
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