Occidental Petroleum Corporation (OXY), a big name in oil and gas, saw its stock jump 6.8% on Friday after releasing strong Q4 2025 earnings that beat what analysts expected. The news came out of Houston, where the company is based, on February 19, 2026, and it sparked talk among investors about why OXY stands out as an investment bet right now. Higher oil production and smart money moves fueled the rise.
Key Takeaways
- OXY posted Q4 earnings per share of $0.31, topping the $0.19 forecast by 63%.
- Company slashed debt to $15 billion through asset sales and repayments.
- Board hiked the quarterly dividend by over 8% to $0.26 per share.
- 2026 capital spending outlook came in lower than expected, easing investor worries.
Background
Occidental Petroleum has roots going back decades in the energy world. It drills for oil and gas, mainly in the U.S., with big operations in the Permian Basin in Texas and New Mexico. The company also runs chemical plants through its OxyChem unit. Over the years, OXY bought up assets like Anadarko Petroleum in 2019, which loaded it with debt but gave it prime land for drilling. That deal, backed by Warren Buffett's Berkshire Hathaway, put OXY in the spotlight. Buffett's group owns about 28% of the company, making it a key player.
But debt hung heavy. At its peak, borrowings topped $40 billion. OXY worked hard to pay it down. It sold off the OxyChem business, pulling in cash to wipe out nearly $14 billion in debt over 20 months. By early 2026, that number sat at $15 billion. And Fitch Ratings just upgraded OXY's credit to BBB with a stable outlook on February 26. That stamp means banks see less risk in lending to them. It's a far cry from junk bond status a few years back.
Oil prices helped too. Crude stayed firm around $70-$80 a barrel in late 2025. That let drillers like OXY make money even as costs rose. The Permian Basin pumps out record oil, and OXY holds some of the best spots there. Competition from ExxonMobil and Chevron keeps pressure on, but OXY's focus on low-cost wells gives it an edge. Investors watch these moves closely, especially with global demand shifting as electric cars grow.
Key Details
OXY's Q4 report dropped on February 19. Earnings per share hit $0.31. Analysts guessed $0.19. That's a 63% beat. Revenue came in at $5.42 billion, short of the $5.88 billion hoped for. But profits mattered more to the Street.
Oil output rose. The company pumped more barrels than last year. And guidance for 2026 surprised everyone. Capital spending will drop below what Wall Street figured. Less cash out means more for shareholders. The board approved a dividend bump too. It's now $0.26 per share, up over 8%. That pays out April 15 to those on record by March.
Hedge Funds and Big Moves
Big players shuffled their decks. Citadel Advisors added over 2.3 million shares in Q4 2025, worth about $97 million. Susquehanna piled on nearly 2 million shares. But others cut back. Hightower dumped 2.1 million shares. American Century shed over 2 million. Overall, 429 funds bought in while 716 sold. Net, institutions hold steady.
Analysts split. Susquehanna says 'Positive' with a $51 target. Wells Fargo calls it 'Underweight.' HSBC likes it at 'Buy.' Price goals range from $43 to $60. Median sits at $46. Shares traded around $51.74 on February 20, up 0.4% that day. Market cap hit $51 billion. Volume ran over 4.6 million shares.
Congress dipped toes in too. Rep. Marjorie Taylor Greene bought up to $15,000 in October. Rep. Gilbert Cisneros sold a similar amount in November. Small trades, but they show eyes on energy stocks.
"OXY's debt reduction and production growth position it well for steady cash returns in a volatile oil market," said an analyst at Susquehanna in a recent note.
For more on asia markets mixed after U.S. energy shifts, check our coverage. And Buffett's stake ties into broader energy sector bets, though different plays.
What This Means
Strong earnings lift OXY's profile. Lower debt frees cash for buybacks or more drilling. Dividend hikes draw income hunters. If oil holds, profits could swell. But revenue misses hint at price or volume risks. 2026 spending cuts signal caution amid uncertainty.
Investors bet on Permian growth. OXY plans more efficient wells. That cuts costs per barrel. Buffett's backing adds trust. His firm bought more shares lately. Shares rose 9% post-earnings, hitting $51.51. Traders eye $60 upside per some targets.
Risks loom. Oil prices swing with geopolitics and demand. Slow global growth could hurt. Electric vehicles nibble at long-term fuel needs. Regulators push green energy. OXY invests in carbon capture too, to offset emissions.
Shareholders get rewards. Buybacks continue. Debt paydown speeds up. Fitch upgrade opens cheaper loans. All this makes OXY look solid. But markets shift fast. Watch Q1 2026 earnings, due in May.
Frequently Asked Questions
What caused OXY's recent stock jump?
Q4 earnings beat estimates at $0.31 EPS versus $0.19 expected. Debt cuts and dividend raises added fuel.
Is Occidental Petroleum a good dividend stock now?
The quarterly payout rose to $0.26 per share, up 8%. Yield appeals to income seekers, backed by cash flow.
What's the outlook for OXY in 2026?
Lower capital spending than forecast. Higher oil production planned. Analysts see targets from $43 to $60.
Frequently Asked Questions
What caused OXY’s recent stock jump?
Q4 earnings beat estimates at $0.31 EPS versus $0.19 expected. Debt cuts and dividend raises added fuel.
Is Occidental Petroleum a good dividend stock now?
The quarterly payout rose to $0.26 per share, up 8%. Yield appeals to income seekers, backed by cash flow.
What’s the outlook for OXY in 2026?
Lower capital spending than forecast. Higher oil production planned. Analysts see targets from $43 to $60.
