Comparative Analysis of Occidental Petroleum (NYSE:OXY) and California Resources (NYSE:CRC)

California Resources (NYSE:CRC) and Occidental Petroleum (NYSE:OXY) are both companies in the oil and energy sector. Investors often wonder which of these two is a better choice for investment. In this article, we will analyze the two companies based on several key factors including earnings strength, dividends, valuation, profitability, institutional ownership, risk, and analyst recommendations.

Institutional & Insider Ownership

California Resources boasts a high institutional ownership of 97.8%, whereas Occidental Petroleum has 88.7% institutional ownership. Interestingly, none of California Resources’ shares are owned by company insiders, while 0.3% of Occidental Petroleum's shares are held by insiders. High levels of institutional ownership often suggest that significant financial entities, such as endowments and hedge funds, expect the stock to perform well in the long term.

Earnings and Valuation

The following table illustrates a comparison of the revenue, earnings per share, and valuation for both companies:

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
California Resources	$2.31 billion	1.54	$564.00 million	$3.49	14.89
Occidental Petroleum	$27.12 billion	1.67	$4.70 billion	$4.06	12.35

Occidental Petroleum shows greater revenue and earnings compared to California Resources. Furthermore, it is currently trading at a lower price-to-earnings ratio, suggesting it may be a more economical option for investors.

Dividends

In terms of dividends, California Resources has an annual payout of $1.55 per share, equating to a yield of 3.0%. Conversely, Occidental Petroleum offers a lower annual dividend of $0.88 per share, with a yield of 1.8%. California Resources distributes 44.4% of its earnings as dividends, while Occidental Petroleum distributes 21.7%. Both companies have sustainable payout ratios, and are likely to maintain their dividend payments in the forthcoming years.

Risk & Volatility

California Resources has a beta of 0.98, indicating that its stock price is 2% less volatile than the overall market, represented by the S&P 500. In contrast, Occidental Petroleum has a beta of 1.57, suggesting it is 57% more volatile than the market.

Analyst Recommendations

The current ratings and target prices for California Resources and Occidental Petroleum are summarized in the table below:

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
California Resources	0	1	9	0	2.90
Occidental Petroleum	1	11	5	1	2.33

Currently, California Resources holds a consensus target price of $65.50, suggesting a potential growth of 26.06%. In comparison, Occidental Petroleum's expected target price is $65.72, pointing to a higher probable upside of 31.10%. This indicates that many analysts favor Occidental Petroleum over California Resources based on potential growth.

Profitability

The two companies can also be compared on profitability metrics such as net margins, return on equity, and return on assets:

	Net Margins	Return on Equity	Return on Assets
California Resources	7.61%	11.27%	5.80%
Occidental Petroleum	16.62%	17.91%	5.42%

Summary

In summary, Occidental Petroleum outperforms California Resources in 11 out of the 17 criteria assessed between the two companies.

About California Resources

California Resources Corporation operates as an independent company involved in the exploration and production of oil and natural gas in the United States. The company is engaged in marketing crude oil, natural gas, and natural gas liquids, serving California refineries and various purchasers with transportation and storage access. Additionally, the company is involved in electricity generation and carbon management projects. Incorporated in 2014, California Resources is headquartered in Long Beach, California.

About Occidental Petroleum

Occidental Petroleum Corporation, along with its subsidiaries, is involved in acquiring, exploring, and developing oil and gas properties in the U.S., the Middle East, and North Africa. The company's operations are divided into three main segments: Oil and Gas, Chemicals, and Midstream and Marketing. The Oil and Gas division focuses on exploration and production, whereas the Chemical segment manufactures numerous industrial chemicals. Founded in 1920, Occidental Petroleum is headquartered in Houston, Texas.

Investment, Analysis, Energy