Occidental Petroleum Corporation has been a significant investment for Warren Buffett in recent years. The legendary investor started buying shares of the energy company in 2022 and has continued to increase his stake. As of the second quarter of 2024, Buffett’s stake in Occidental was valued at $16.09 billion.
Analysts are bullish on Occidental, with an average price target of $70.44, representing a potential upside of 37.79% from current levels. The stock has a consensus rating of Moderate Buy, based on 6 buy ratings, 10 hold ratings, and 1 sell rating from Wall Street analysts. Buffett’s optimism about Occidental stems from his belief in the future trajectory of oil prices and the company’s operational advantages.
Occidental has a breakeven price for oil below $60 per barrel, ensuring profitability when oil prices are above $70.
Buffett’s confidence in Occidental
The company has also made several multi-billion-dollar acquisitions, including CrownRock’s holdings assets in the Midland Basin, which have expanded its footprint and strengthened its competitive position.
Occidental has returned billions of dollars to shareholders through share buybacks and dividends. The company currently offers a dividend yield of around 1.7%, making it an attractive option for income-seeking investors. The number of hedge funds holding stakes in Occidental increased to 62 by the end of the second quarter of 2024, with the total value of these stakes exceeding $18.52 billion.
This indicates strong institutional interest in the stock. Given Occidental’s strong fundamentals, Buffett’s confidence in the company, and analysts’ positive outlook, it remains one of the top Warren Buffett stocks to buy. As the Oracle of Omaha gradually steps back from his investment empire, Occidental Petroleum Corporation continues to be a key holding in his portfolio, with the potential for significant returns in the coming years.
