Are These Two Stocks Worth Buying After Oil Prices

NYSE: OXY | Occidental Petroleum Corporation  News, Ratings, and Charts

OXY – Oil prices dropped on the news of growing U.S. stockpiles and OPEC raising supply. However, a ban on Russian oil amid robust demand might cause oil prices to hit significant highs soon. So, should you invest in energy stocks Occidental Petroleum (OXY) and Devon Energy (DVN) now? Read on to find out….

On Wednesday, oil prices slipped about 4% to hit almost six-month lows. Brent crude futures settled down 3.7% at $96.78 a barrel. The decline was mainly driven by U.S. data showing an unexpected rise in crude and gasoline stockpiles and OPEC+ agreeing to raise its oil output target by 100,000 barrels per day (bpd).

On the other hand, OPEC has provided an optimistic outlook on global oil demand. The cartel expects total world demand in 2023 to average a record high of 103 million bpd, up from the 100.29 million bpd expected for 2022. OPEC sees a fourth-quarter demand as high as 105.4 million bpd.

According to Neal Dingmann, Truist’s managing director of energy research, oil prices could climb over $150 per barrel if the tight supply created by the ban on Russian oil and gas is not mitigated.

Given this backdrop, we think the fundamentally strong oil and gas stocks Occidental Petroleum Corporation (OXY) and Devon Energy Corporation (DVN) might be ideal additions to one’s watchlist.

Occidental Petroleum Corporation (OXY)

OXY is an oil and gas exploration company primarily operating in the United States, the Middle East, Africa, and Latin America​​.​ The company operates through three segments: Oil and Gas; Chemical; and Marketing and Midstream.

On July 27, OXY announced a regular quarterly dividend of $0.13 per share on its common stock, payable to shareholders on October 17. This reflects upon the company’s ability to return back to its shareholders.

On June 27, 1PointFive, a subsidiary of OXY’s Low Carbon Ventures (OLCV) business, and Manulife Investment Management announced that they had entered into a lease agreement for approximately 27,000 acres of timberland in Western Louisiana. This is expected to advance the company’s commercial-scale decarbonization solutions.  

For the fiscal second quarter of 2022, OXY’s total revenues and other income increased 78.6% year-over-year to $10.74 billion. Adjusted income attributable to common stockholders and adjusted EPS came in at $3.24 billion and $3.16, up 941.8% and 887.5% from the prior-year quarter.

The consensus revenue estimate for the quarter ending September 2022 of $10.26 billion reflects a 56.6% year-over-year improvement. Additionally, OXY has beaten consensus EPS estimates in each of the trailing four quarters, which is impressive.

The stock has gained 130.8% over the past year and 110.4% year-to-date to close its last trading session at $60.99.

OXY’s strong fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree. The stock has a Momentum grade of A and a Growth and Quality grade of B. 

In the 97-stock Energy – Oil & Gas industry, it is ranked #42. The industry is rated B. Click here to see the additional POWR Ratings for OXY (Value, Stability, and Sentiment).

Devon Energy Corporation (DVN)

DVN is an independent energy company that explores, develops, and produces oil, natural gas, and natural gas liquids in the United States. The company operates several gross wells.

On August 1, DVN declared a fixed-plus-variable dividend of $1.55 per share based on its second-quarter financial performance. This marks a 22% increase from the prior quarter and reflects upon the company’s cash generation ability.

On July 21, DVN announced that it had completed its acquisition of the leasehold interest and related assets of RimRock Oil and Gas, LP, in the Williston Basin. This acquisition is expected to boost the company’s production and cash flow.

DVN’s total revenues increased 132.8% year-over-year to $5.63 billion in the fiscal second quarter of 2022. Net earnings rose 642.5% from the prior-year quarter to $1.94 billion. Net earnings per share improved 671.1% from the same period the prior year to $2.93.

Street EPS estimate for the quarter ending September 2022 of $2.45 indicates a 126.9% year-over-year increase. Likewise, Street revenue estimate for the same quarter of $5.03 billion reflects a rise of 45.2% from the prior-year period. Moreover, DVN has an impressive surprise earnings history, as it has topped consensus EPS estimates in each of the trailing four quarters.

Over the past year, the stock has gained 116.3% to close its last trading session at $56.70. It has gained 28.7% year-to-date.

DVN’s POWR Ratings reflect this promising outlook. The stock has an A grade for Momentum and a B for Quality. It is ranked #44 in the same industry.

In addition to the POWR Rating grades we’ve stated above, one can see DVN ratings for Growth, Value, Stability, and Sentiment here.


OXY shares were trading at $58.97 per share on Thursday afternoon, down $2.02 (-3.31%). Year-to-date, OXY has gained 104.29%, versus a -12.17% rise in the benchmark S&P 500 index during the same period.


About the Author: Anushka Dutta


Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
OXYGet RatingGet RatingGet Rating
DVNGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Recession or Not Recession…That Is the Question

Every investor appreciates that recessions and bear markets go hand in hand. But the definition of a recession often seems more difficult to pin down. So are we in a recession? And if not, then does that mean that disaster has been averted or that the pain train is still rolling towards investors? This is an important debate because it helps us appreciate what lies ahead for the stock market (SPY). We will tackle this vital topic in this week's commentary. Read on below...

:  |  News, Ratings, and Charts

3 Active Stocks on Wall Street to Buy Right Now

Even though the U.S. stocks ended July with decent gains, growing recession fears could keep the stock market under pressure in the near term. However, despite the current market headwinds, it could be wise to invest in fundamentally sound stocks, Microsoft (MSFT), SIGA Technologies (SIGA), and Fortinet (FTNT), which have been active on Wall Street lately. Read on to learn more…

:  |  News, Ratings, and Charts

4 Big Reasons Why the Bear Rally Is Nearing an End…

The Stock Market (SPY) has put on an impressive rally over the last few weeks, leading many investors to believe that the bull is ready to resume its run. However, there are multiple reasons to believe the bear market is far from over. I lay out 4 of the main reasons below and explain how you can profit from the volatile markets that lie ahead. Read on below for more…

:  |  News, Ratings, and Charts

2 Winning Stocks to Pay Attention to This Week

Concerns over soaring inflation, the Fed’s aggressive interest rate hikes, the decline in GDP for two consecutive quarters, and a potential recession are expected to keep the stock market under pressure in the near term. Fundamentally sound and winning stocks Murphy USA (MUSA) and JAKKS Pacific (JAKK) could be good additions to your watchlist as investors prepare for a busy week of inflation data. Let’s discuss…

:  |  News, Ratings, and Charts

4 Big Reasons Why the Bear Rally Is Nearing an End…

The Stock Market (SPY) has put on an impressive rally over the last few weeks, leading many investors to believe that the bull is ready to resume its run. However, there are multiple reasons to believe the bear market is far from over. I lay out 4 of the main reasons below and explain how you can profit from the volatile markets that lie ahead. Read on below for more…

Read More Stories

More Occidental Petroleum Corporation (OXY) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All OXY News