Oct 18, 2024, 2:31 PM
Oct 18, 2024, 2:31 PM

Warren Buffett's Interest in Occidental Stock Amid Decline

Highlights
  • Berkshire Hathaway maintains substantial investments in both Occidental Petroleum and Chevron, with Buffett expressing confidence in Occidental due to its debt reduction and leadership.
  • Despite selling Chevron shares, Buffett's investment firm holds about 6% of Chevron, suggesting a strategic adjustment rather than a negative stance toward the company.
  • Investors should assess these developments based on their investment strategies, as Chevron offers a more attractive dividend yield in comparison to Occidental.
Story

Occidental Petroleum Corp. has faced a decline of 13.4% in 2024 and over 20% in the past year, yet Warren Buffett continues to express confidence in the company. Buffett’s positive stance stems from his respect for CEO Vicki Hollum and the company’s successful reduction of debt by more than 50%. The anticipation of rising oil prices may further strengthen Occidental's position. In contrast, Buffett's recent sale of shares in Chevron suggests a strategic shift, possibly indicating that Chevron’s stock price has become overly high for his investment criteria. Berkshire Hathaway, Buffett's investment firm, has significant holdings in both Occidental and Chevron, owning approximately 6% of Chevron's stock, making it one of his largest investments. This is complemented by a prior investment in Occidental that provided an annual yield of 8% through preferred stock and warrants to purchase shares. Despite selling Chevron shares, it is essential to note that Buffett does not harbor negative feelings towards Chevron. As oil demand continues to be a subject of speculation, the contrasting investment strategies highlight Buffett's cautious approach amidst fluctuating market conditions. Those looking for income investments may find Chevron's higher dividend yield more attractive, as it has shown a growth rate of 5.38% over the last three years. Overall, both Occidental and Chevron remain important components of Buffett's portfolio, illustrating his multifaceted investment perspective in the oil industry. Investors should consider personal strategies when evaluating these stocks, as market dynamics continue to evolve.

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