Analyzing Occidental Petroleum (OXY) and EQT GP (EQGP)
Occidental Petroleum (NYSE: OXY) and EQT GP (NYSE:EQGP) are both mid-cap energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.
Insider and Institutional Ownership
80.2% of Occidental Petroleum shares are owned by institutional investors. Comparatively, 10.2% of EQT GP shares are owned by institutional investors. 0.3% of Occidental Petroleum shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This is a summary of recent recommendations for Occidental Petroleum and EQT GP, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Occidental Petroleum presently has a consensus price target of $65.43, suggesting a potential downside of 9.85%. EQT GP has a consensus price target of $32.63, suggesting a potential upside of 23.72%. Given EQT GP’s stronger consensus rating and higher probable upside, analysts plainly believe EQT GP is more favorable than Occidental Petroleum.
Occidental Petroleum pays an annual dividend of $3.08 per share and has a dividend yield of 4.2%. EQT GP pays an annual dividend of $0.91 per share and has a dividend yield of 3.5%. Occidental Petroleum pays out 433.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EQT GP pays out 96.8% 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 increased its dividend for 14 consecutive years. Occidental Petroleum is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Occidental Petroleum and EQT GP’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Occidental Petroleum||$10.40 billion||5.34||-$574.00 million||$0.71||102.23|
|EQT GP||$735.61 million||9.54||$234.17 million||$0.94||28.05|
EQT GP has lower revenue, but higher earnings than Occidental Petroleum. EQT GP is trading at a lower price-to-earnings ratio than Occidental Petroleum, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Occidental Petroleum has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, EQT GP has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.
This table compares Occidental Petroleum and EQT GP’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
EQT GP beats Occidental Petroleum on 10 of the 16 factors compared between the two stocks.
Occidental Petroleum Company Profile
Occidental Petroleum Corporation (Occidental) is an oil and gas exploration and production company. The Company operates through three segments: oil and gas, chemical (OxyChem), 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 OxyChem segment manufactures and markets basic chemicals and vinyls. The midstream and marketing segment gathers, processes, transports, stores, purchases and markets oil, condensate, NGLs, natural gas, carbon dioxide (CO2) and power. The Company also trades around its assets, including transportation and storage capacity. Additionally, the midstream and marketing segment invests in entities that conduct similar activities. Occidental’s domestic upstream oil and gas operations are located in New Mexico and Texas. Its international operations are located in Bolivia, Colombia, Oman, Qatar and the United Arab Emirates (UAE).
EQT GP Company Profile
EQT GP Holdings, LP (EQGP) is a limited partnership company and subsidiary of EQT Gathering Holdings, LLC (EQT Gathering Holdings). The Company was formed to own EQT Corporation’s (EQT’s) partnership interests in EQT Midstream Partners, LP (EQM), a limited partnership formed by EQT to own, operate, acquire and develop midstream assets in the Appalachian Basin. Its segments include Gathering, and Transmission. The Gathering segment primarily includes high pressure gathering lines and the Federal Energy Regulatory Commission (FERC)-regulated low pressure gathering system. The Transmission segment includes EQM’s FERC-regulated interstate pipeline and storage business. EQGP has no independent operations. It has partnership interests in EQM. As of December 31, 2016, EQM provided midstream services to EQT and various third parties across 24 counties in Pennsylvania, West Virginia and Ohio through its two primary assets: the gathering system, and the transmission and storage system.
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