Unit (NYSE:UNT) & Occidental Petroleum (NYSE:OXY) Critical Analysis

Unit (NYSE:UNT) and Occidental Petroleum (NYSE:OXY) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Profitability

This table compares Unit and Occidental Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Unit -82.10% -4.23% -2.35%
Occidental Petroleum -2.94% 4.82% 1.46%

Institutional & Insider Ownership

76.2% of Unit shares are owned by institutional investors. Comparatively, 78.5% of Occidental Petroleum shares are owned by institutional investors. 5.2% of Unit shares are owned by company insiders. Comparatively, 0.2% of Occidental Petroleum shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Unit and Occidental Petroleum, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Unit 1 0 1 0 2.00
Occidental Petroleum 7 11 2 1 1.86

Unit currently has a consensus target price of $14.00, suggesting a potential upside of 4,211.67%. Occidental Petroleum has a consensus target price of $38.06, suggesting a potential upside of 196.61%. Given Unit’s stronger consensus rating and higher possible upside, research analysts plainly believe Unit is more favorable than Occidental Petroleum.

Risk and Volatility

Unit has a beta of 2.36, indicating that its share price is 136% more volatile than the S&P 500. Comparatively, Occidental Petroleum has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Earnings & Valuation

This table compares Unit and Occidental Petroleum’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Unit $674.63 million 0.03 -$553.88 million ($1.13) -0.29
Occidental Petroleum $21.23 billion 0.54 -$667.00 million $1.45 8.85

Unit has higher earnings, but lower revenue than Occidental Petroleum. Unit is trading at a lower price-to-earnings ratio than Occidental Petroleum, indicating that it is currently the more affordable of the two stocks.

Summary

Occidental Petroleum beats Unit on 9 of the 15 factors compared between the two stocks.

About Unit

Unit Corporation, together with its subsidiaries, engages in the exploration, acquisition, development, and production of oil and natural gas properties in the United States. It operates through three segments: Oil and Natural Gas, Contract Drilling, and Mid-Stream. The Oil and Natural Gas segment explores for, acquires, develops, and produces oil and natural gas properties. Its producing oil and natural gas properties, unproved properties, and related assets are primarily located in Oklahoma and Texas, as well as in Arkansas, Colorado, Kansas, Louisiana, Montana, New Mexico, North Dakota, Utah, and Wyoming. The Contract Drilling segment is involved in the contract drilling of onshore oil and natural gas wells for a range of other oil and natural gas companies primarily in Oklahoma, Texas, Wyoming, North Dakota, Colorado, and Utah. It has 55 drilling rigs in its fleet. The Mid-Stream segment buys, sells, gathers, processes, and treats natural gas for third parties. This segment operates 3 natural gas treatment plants, 14 processing plants, 22 gathering systems, and approximately 1,475 miles of pipeline in Oklahoma, Texas, Kansas, Pennsylvania, and West Virginia. Unit Corporation was founded in 1963 and is headquartered in Tulsa, Oklahoma.

About Occidental Petroleum

Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. The company operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing. The Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas. The Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride; vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also trades around its assets consisting of transportation and storage capacity; and invests in entities. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.

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