By Oil stocks are seeing a decline following an attack from Israel that killed four Iranian soldiers over the weekend.
Investors’ concerns about global geopolitical instability and the broader repercussions for oil prices pushed Occidental Petroleum Corp (NYSE: OXY) down further to about $50 on Monday.
Shares of the hydrocarbon exploration company have now lost more than 25% since early April.
But has it found a bottom yet? Is now a suitable time to build a position in Occidental stock? Let’s explore.
OXY has been reducing its debt
Occidental Petroleum may be a reasonable pick at writing as it’s sensitive to changes in oil prices that historically gain during times of war.
Like in 2022, when Russia launched a military action against Ukraine, Occidental Petroleum reported record profits that it used to lower its debt by a whopping $10 billion.
The Houston-headquartered firm continued to strengthen its balance sheet this year, reducing another $3.0 billion in debt.
All in all, OXY has successfully trimmed its debt by an exciting 60% in recent years.
That makes up for the first big reason to consider investing in Occidental stock following the sell-off over the past six months.
Shares of the oil giant are positioned for healthy total returns as they pay a dividend of 1.74% as well.
Wall Street currently sees upside in Occidental Petroleum shares to $65 on average that indicates a potential 30% upside from here.
Own Occidental stock for its DAC investments
An interesting reason to load up on Occidental shares is the company’s investments in direct-air-capture (DAC) technology.
DAC enables this New York listed firm to remove carbon dioxide from the air by capturing and then storing it underground.
Direct-air-capture technology has invoked significant interest in tech titans as they continue to look for ways to deliver on their carbon-neutral commitments.
Earlier this year, 1PointFive announced a deal with Microsoft to “sell 500,000 metric tons of carbon dioxide removal credits over six years.”
OXY expects carbon capture utilization and sequestration (CCUS) to eventually be a $3 to $5 trillion market.
It even expects to ultimately start bringing in as much revenue from this segment as it currently does from oil and gas production.
Lastly, Occidental stock is worth considering since legendary investor Warren Buffett is betting big on it.
Despite weakness over the past six months, his conglomerate Berkshire Hathaway has continued to increase its stake in the energy company.
Berkshire currently owns 255 million shares of Occidental Petroleum in total that makes the oil giant its sixth-largest holding.
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