Occidental Petroleum: Buy, Sell, or Hold?

By Courtney Carlsen – Mar 1, 2026 at 2:43PM ESTKey PointsOccidental Petroleum has significantly reduced its debt load over the past few years. It's generating solid free cash flow, driven by its midstream and marketing segments.It could also benefit from the growing demand from data centers and utility providers.Occidental Petroleum (OXY +3.14%) has been a popular energy stock since Warren Buffett invested in it several years ago. Berkshire Hathaway holds over 265 million shares in the oil and gas company and has maintained its investment despite volatility in the stock over the past few years. The company is paying down debt and could be well positioned as demand for energy grows over the coming decade. If you're a shareholder or considering opening a position in Occidental, here's what you should know to decide whether it's a buy, hold, or sell today. ExpandNYSE: OXYOccidental PetroleumToday's Change(3.14%) $1.61Current Price$53.05Key Data PointsMarket Cap$52BDay's Range$51.88 - $53.2352wk Range$34.78 - $53.33Volume657KAvg Vol11MGross Margin31.94%Dividend Yield1.81% Reasons to buy or hold One of the biggest criticisms of Occidental was its massive debt load following its 2019 acquisition of Anadarko. At the time, the company's debt load spiked to nearly $48 billion. This came around the same time as the COVID-19 oil crash. However, in the past 20 months, the company has aggressively paid down $13.9 billion in debt and improved its financial footing. The company has strong earnings performance despite the drop in oil prices, thanks to strong results from its midstream and marketing segments. During the year, it generated $4.3 billion in free cash flow. Its midstream segment surpassed its annual guidance for pre-tax income by more than $550 million, driven by strong performance in the Permian Basin and higher-than-expected sulfur pricing at its Al Hosn gas facility in the UAE. Image source: Getty Images. Longer term, demand for gas from data centers, industrial operators, and other utility providers could provide a strong tailwind for the natural gas sector. Last year, Occidental sold an average of 2,278 million cubic feet per day (MMcf/d) of natural gas globally and holds 7,745 billion cubic feet (Bcf) of proven natural gas reserves. Reasons to sell As part of its debt reduction process, Occidental sold its chemical business, OxyChem, to Berkshire Hathaway for $9.7 billion. Selling OxyChem allows the company to focus on U.S. onshore oil and gas production and reduce its debt balance. However, it also removes one of the more balanced aspect of its business that help insulate it against volatility in energy commodity prices. As a result, earnings could be more volatile. On top of that, Occidental's capital structure could limit its upside potential. Even though the company has reduced its principal debt, it still has approximately $8.3 billion in preferred stock outstanding held by Berkshire Hathaway. Occidental paid $679 million in preferred dividends last year and is prohibited from paying common dividends if the 8% preferred dividends are not paid in full. Buy, sell, or hold Occidental? Occidental has done a good job shoring up its balance sheet and provides investors with a way to profit from rising oil and gas prices. That said, it's not as diverse as some of its larger integrated competitors, such as ExxonMobil and Chevron, especially after selling its OxyChem business. As a result, you are more vulnerable to falling oil and gas prices. If you're bullish on energy commodity prices from here, Occidental is a good stock to play that upside. But if you're worried about oil prices declining from here, you may want to sell the stock after its 24% run-up to the start of 2026.Read NextMar 1, 2026 •By Brett Schafer2 No-Brainer Energy Stocks to Buy Right NowFeb 26, 2026 •By Reuben Gregg BrewerOccidental Petroleum Stock Rocketed More Than 10% in January (but the Big Move Came in February)Feb 20, 2026 •By Matt DiLalloHow This Buzzword Helped Occidental Petroleum Overcome Lower Oil Prices to Deliver Strong Fourth-Quarter ResultsFeb 19, 2026 •By Joe TenebrusoWhy Occidental Stock Popped TodayFeb 16, 2026 •By Matt DiLalloShould You Buy Occidental Petroleum Stock Before Feb. 18?Feb 6, 2026 •By Matt DiLalloWhy Occidental Petroleum Stock Rocketed More Than 10% in JanuaryAbout the AuthorCourtney Carlsen is a contributing Motley Fool stock market analyst covering financial, real estate, industrial, and energy stocks.

Before The Motley Fool, Courtney was a lead senior auditor for the State of Florida. He holds a master’s degree in accounting from the University of Florida.TMFCourtCarlsenStocks MentionedOccidental PetroleumNYSE: OXY$53.05(+3.14%)+$1.62*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.