Occidental Petroleum (NYSE: OXY) and Black Stone Minerals (NYSE:BSM) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.
This is a summary of recent recommendations and price targets for Occidental Petroleum and Black Stone Minerals, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Black Stone Minerals||0||2||3||0||2.60|
Occidental Petroleum presently has a consensus price target of $71.53, indicating a potential upside of 10.61%. Black Stone Minerals has a consensus price target of $19.00, indicating a potential upside of 14.53%. Given Black Stone Minerals’ stronger consensus rating and higher possible upside, analysts plainly believe Black Stone Minerals is more favorable than Occidental Petroleum.
This table compares Occidental Petroleum and Black Stone Minerals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Black Stone Minerals||22.90%||12.93%||7.46%|
Volatility & Risk
Occidental Petroleum has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Black Stone Minerals has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500.
Occidental Petroleum pays an annual dividend of $3.08 per share and has a dividend yield of 4.8%. Black Stone Minerals pays an annual dividend of $1.25 per share and has a dividend yield of 7.5%. Occidental Petroleum pays out 346.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Black Stone Minerals pays out 123.8% 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 15 consecutive years and Black Stone Minerals has increased its dividend for 2 consecutive years. Black Stone Minerals is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
82.7% of Occidental Petroleum shares are held by institutional investors. Comparatively, 22.7% of Black Stone Minerals shares are held by institutional investors. 0.1% of Occidental Petroleum shares are held by insiders. Comparatively, 25.0% of Black Stone Minerals shares are held by 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.
Valuation & Earnings
This table compares Occidental Petroleum and Black Stone Minerals’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Occidental Petroleum||$13.27 billion||3.73||$1.31 billion||$0.89||72.66|
|Black Stone Minerals||$429.66 million||7.71||$157.18 million||$1.01||16.43|
Occidental Petroleum has higher revenue and earnings than Black Stone Minerals. Black Stone Minerals is trading at a lower price-to-earnings ratio than Occidental Petroleum, indicating that it is currently the more affordable of the two stocks.
Black Stone Minerals beats Occidental Petroleum on 10 of the 17 factors compared between the two stocks.
Occidental Petroleum Company Profile
Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. The company operates through three segments: Oil and Gas, Chemical, 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 Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride; vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also trades around its assets consisting of transportation and storage capacity; operates a crude oil export terminal; and invests in entities. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.
Black Stone Minerals Company Profile
Black Stone Minerals, L.P. is an owner of oil and natural gas mineral interests in the United States. The Company’s principal business is maximizing the value of its existing portfolio of mineral and royalty assets through active management and expanding its asset base through acquisitions of additional mineral and royalty interests. As of December 31, 2016, it owned mineral interests in approximately 15.5 million acres, with an average 45.7% ownership interest in that acreage. As of December 31, 2016, it also owned nonparticipating royalty interests in 1.5 million acres and overriding royalty interests in 1.5 million acres. As of December 31, 2016, these non-cost-bearing interests, which it referred to collectively as its mineral and royalty interests, included ownership in 50,000 producing wells. As of December 31, 2016, its mineral and royalty interests were located in 41 states and in 64 onshore basins in the continental United States.
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