Anadarko Petroleum (NYSE: APC) and Occidental Petroleum (NYSE:OXY) are both large-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.
Insider and Institutional Ownership
88.0% of Anadarko Petroleum shares are held by institutional investors. Comparatively, 82.7% of Occidental Petroleum shares are held by institutional investors. 0.5% of Anadarko Petroleum shares are held by insiders. Comparatively, 0.3% of Occidental Petroleum shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a summary of current ratings and target prices for Anadarko Petroleum and Occidental Petroleum, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Anadarko Petroleum currently has a consensus price target of $67.44, suggesting a potential upside of 15.33%. Occidental Petroleum has a consensus price target of $70.64, suggesting a potential upside of 10.53%. Given Anadarko Petroleum’s stronger consensus rating and higher probable upside, equities analysts plainly believe Anadarko Petroleum is more favorable than Occidental Petroleum.
Valuation and Earnings
This table compares Anadarko Petroleum and Occidental Petroleum’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Anadarko Petroleum||$11.91 billion||2.62||-$456.00 million||($0.81)||-72.20|
|Occidental Petroleum||$13.27 billion||3.68||$1.31 billion||$1.71||37.37|
Occidental Petroleum has higher revenue and earnings than Anadarko Petroleum. Anadarko Petroleum is trading at a lower price-to-earnings ratio than Occidental Petroleum, indicating that it is currently the more affordable of the two stocks.
Anadarko Petroleum pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. Occidental Petroleum pays an annual dividend of $3.08 per share and has a dividend yield of 4.8%. Anadarko Petroleum pays out -123.5% of its earnings in the form of a dividend. Occidental Petroleum pays out 180.1% 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 raised its dividend for 15 consecutive years. Occidental Petroleum is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Anadarko Petroleum has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Occidental Petroleum has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.
This table compares Anadarko Petroleum and Occidental Petroleum’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Occidental Petroleum beats Anadarko Petroleum on 10 of the 17 factors compared between the two stocks.
Anadarko Petroleum Company Profile
Anadarko Petroleum Corporation (Anadarko) is an independent exploration and production company. The Company is engaged in developing, acquiring, and exploring for oil and natural-gas resources. The Company’s segments include Oil and Gas Exploration and Production; Midstream, and Marketing. The Company’s geographical segments include the United States and International. The Oil and Gas Exploration and Production segment explores for and produces oil, condensate, natural gas and natural gas liquids (NGLs), and focuses on the development and operation of the Company’s liquefied natural gas (LNG) project in Mozambique. The Midstream segment engages in gathering, processing, treating and transporting Anadarko and third-party oil, natural-gas and NGLs production. The Marketing segment sells Anadarko’s oil, natural-gas and NGLs production, as well as third-party purchased volumes. As of December 31, 2016, the Company had approximately 1.7 billion barrels of oil equivalent (BOE).
Occidental Petroleum Company Profile
Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. The company operates through three segments: Oil and Gas, Chemical, 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 Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride; vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also trades around its assets consisting of transportation and storage capacity; operates a crude oil export terminal; and invests in entities. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.
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