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Why This 1 Value Stock Could Be a Great Addition to Your Portfolio

Zacks Equity Research
·2 min read

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.

Achieving those goals is made easier with the Zacks Style Scores, a unique set of guidelines that rates stocks based on popular investing methodologies, namely value, growth, and momentum. The Style Scores can help you narrow down which stocks are better for your portfolio and which ones can beat the market over the long-term.

Why Investors Should Pay Attention to This Value Stock

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, the Value Style Score identifies the most attractive and most discounted stocks.

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Occidental Petroleum (OXY)

Founded in 1920, Houston, TX-based Occidental Petroleum Corporation is an integrated oil and gas company, with significant exploration and production exposure. The company is also a producer of a variety of basic chemicals, petrochemicals, polymers and specialty chemicals. The company conducts its operations through three segments: Oil and Gas, Chemical, and Midstream and Marketing. At 2021-end, Occidental’s preliminary worldwide proved reserves totaled 3.51 billion BOE compared with 2.91 billion BOE at the end of 2020. As of Dec 31, 2021,the company's proved reserves consisted of approximately 50.4% oil, 21.8% NGL and 27.8% gas.

OXY is a Zacks Rank #3 (Hold) stock, with a Value Style Score of A and VGM Score of A. Shares are currently trading at a forward P/E of 6X for the current fiscal year compared to the Oil and Gas - Integrated - United States industry's P/E of 11.5X. Additionally, OXY has a PEG Ratio of 0.2 and a Price/Cash Flow ratio of 5.3X. Value investors should also note OXY's Price/Sales ratio of 2X.

Many value investors pay close attention to a company's earnings as well. For OXY, eight analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $1.07 to $10.36 per share for 2022. Per share OXY boasts an average earnings surprise of 26.2%.

OXY should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.


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