Occidental Petroleum: A Bargain Dividend Stock At Its 12-Year Low

Occidental Petroleum (OXY) recently prevailed in a bidding war over the acquisition of Anadarko Petroleum (APC). As this $38 billion transaction value of this acquisition is almost equal to the $40 billion market capitalization of Occidental, it is evident that this is a major acquisition for the company.
However, since Occidental prevailed in the bidding war, the stock has been severely punished by the market and is now trading at a 12-year low level. In turn, Occidental's dividend yield is approaching 6%, a decade-high yield for the stock. You can see all of the 5%+ yielding stocks here.
At the same time, the company has raised its dividend for 16 consecutive years. It is one of 264 Dividend Achievers, a group of stocks with 10+ years of dividend growth. Therefore, the question is whether Occidental is a bargain dividend stock. In order to answer this question, it is important to take a closer look at the deal with Anadarko.
Business Overview
Occidental is an international oil and gas exploration and production company, with operations in the U.S., the Middle East and Latin America. Apart from its upstream segment, the company also has a midstream and a chemical segment but it is much more leveraged to the price of oil than the well-known integrated oil majors, such as Exxon Mobil (XOM) and Chevron (CVX).
This became evident in the downturn of the energy sector, which lasted from 2014 to 2017. Occidental posted a marginal profit of $0.12 per share in 2015 and... Read more

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