Investors seeking opportunities in the energy sector often face choices between giants and niche players. Occidental Petroleum Corporation (OXY) and Texas Pacific Land Corporation (TPL) both operate in oil and gas exploration and production but with distinct business models—OXY focuses on integrated operations, while TPL specializes in land and resource management. This article will help you determine which company aligns best with your investment goals and risk appetite.
Table of contents
Companies Overview
I will begin the comparison between Occidental Petroleum Corporation and Texas Pacific Land Corporation by providing an overview of these two companies and their main differences.
Occidental Petroleum Corporation Overview
Occidental Petroleum Corporation operates in the oil and gas exploration and production sector, with a mission to acquire, explore, and develop oil and gas properties across the US, Middle East, Africa, and Latin America. It also engages in chemical manufacturing and midstream marketing activities. Founded in 1920 and headquartered in Houston, Texas, Occidental is a well-established player with a diversified energy portfolio.
Texas Pacific Land Corporation Overview
Texas Pacific Land Corporation focuses on land and resource management along with water services operations. It manages about 880,000 acres of land in Texas, holding various nonparticipating royalty interests and leasing land for different commercial uses. The company also provides water sourcing, treatment, and disposal services in the Permian Basin. Founded in 1888 and based in Dallas, Texas, it operates with a lean workforce and specialized services.
Key similarities and differences
Both companies operate in the energy sector with a focus on oil and gas, but Occidental emphasizes exploration, production, chemicals, and midstream marketing, whereas Texas Pacific Land specializes in land management, royalties, and water services. Occidental has a much larger workforce and market capitalization (42B vs. 21B USD), reflecting its broader operational scope, while Texas Pacific Land’s business model centers on asset management and service provision within a defined geographic area.
Income Statement Comparison
The table below presents a side-by-side comparison of key income statement metrics for Occidental Petroleum Corporation and Texas Pacific Land Corporation for the fiscal year 2024.
| Metric | Occidental Petroleum Corporation | Texas Pacific Land Corporation |
|---|---|---|
| Market Cap | 42.2B | 21.5B |
| Revenue | 27.1B | 706M |
| EBITDA | 12.7B | 564M |
| EBIT | 5.25B | 539M |
| Net Income | 3.04B | 454M |
| EPS | 2.59 | 6.58 |
| Fiscal Year | 2024 | 2024 |
Income Statement Interpretations
Occidental Petroleum Corporation
Occidental’s revenue and net income showed substantial growth from 2020 to 2024, with revenue up 58.12% and net income rising 120.52%. Margins remain favorable overall despite a recent decline in revenue (-4.35%) and net income (-31.92%) in 2024. The latest fiscal year saw a slowdown in growth, with EBIT dropping 28.87% and EPS decreasing 37.4%, signaling some pressure on profitability.
Texas Pacific Land Corporation
Texas Pacific Land exhibited strong revenue and net income growth over the 2020-2024 period, with revenue increasing 133.29% and net income up 157.86%. Margins are notably high and stable, with a gross margin near 90% and net margin above 64%. In 2024, the company continued its upward trajectory with 11.75% revenue growth and a slight net margin improvement, reflecting consistent operational strength.
Which one has the stronger fundamentals?
Texas Pacific Land shows stronger fundamentals with higher and more consistent margins, robust revenue and net income growth, and no unfavorable income metrics in the most recent year. Occidental Petroleum, while demonstrating favorable long-term growth, experienced declines in key profitability and margin metrics in 2024, indicating more volatility and recent profitability challenges compared to Texas Pacific Land.
Financial Ratios Comparison
The table below presents a side-by-side comparison of key financial ratios for Occidental Petroleum Corporation (OXY) and Texas Pacific Land Corporation (TPL) based on their most recent fiscal year data ending 2024-12-31.
| Ratios | Occidental Petroleum Corporation (OXY) | Texas Pacific Land Corporation (TPL) |
|---|---|---|
| ROE | 8.91% | 40.09% |
| ROIC | 5.48% | 35.60% |
| P/E | 14.81 | 18.67 |
| P/B | 1.32 | 7.48 |
| Current Ratio | 0.95 | 8.33 |
| Quick Ratio | 0.73 | 8.33 |
| D/E (Debt-to-Equity) | 0.79 | 0.0004 |
| Debt-to-Assets | 31.72% | 0.04% |
| Interest Coverage | 5.08 | 0 |
| Asset Turnover | 0.32 | 0.57 |
| Fixed Asset Turnover | 0.39 | 1.27 |
| Payout Ratio | 47.52% | 76.51% |
| Dividend yield | 3.21% | 4.10% |
Interpretation of the Ratios
Occidental Petroleum Corporation
Occidental Petroleum shows a mixed profile in 2024 with favorable net margin and valuation ratios (PE 14.81, PB 1.32), but challenges in liquidity (current ratio 0.95) and asset turnover (0.32). Return on equity is below expectations at 8.91%, signaling potential efficiency issues. The company pays dividends, offering a 3.21% yield, supported by a stable payout ratio but caution is advised due to modest free cash flow coverage.
Texas Pacific Land Corporation
Texas Pacific Land exhibits strong profitability with a 64.32% net margin, 40.09% ROE, and 35.6% ROIC, reflecting efficient capital use. Despite a high PB ratio of 7.48 and an elevated current ratio of 8.33, quick ratio and debt metrics are very favorable, indicating financial strength. The 4.1% dividend yield is well-supported, benefiting from solid free cash flow and no debt obligations.
Which one has the best ratios?
Texas Pacific Land’s ratios lean more favorably, driven by robust profitability and strong financial health, despite a high valuation multiple and liquidity imbalance. Occidental Petroleum’s mixed liquidity and efficiency metrics counterbalance its more moderate valuation and dividend yield. Overall, Texas Pacific Land presents a more consistently favorable ratio profile in 2024.
Strategic Positioning
This section compares the strategic positioning of Occidental Petroleum Corporation and Texas Pacific Land Corporation, including market position, key segments, and exposure to technological disruption:
Occidental Petroleum Corporation
- Large market cap of 42B with diversified energy segments facing competition in oil and gas exploration and production.
- Operates in Oil and Gas, Chemical, and Midstream segments, driven by exploration, production, and chemical manufacturing.
- Exposure to technological disruption is moderate, primarily linked to evolving energy production and chemical manufacturing technologies.
Texas Pacific Land Corporation
- Mid-sized market cap of 21B focused on land and resource management with less direct competitive pressure.
- Key segments include land management, oil and gas royalties, easements, and water services within the Permian Basin.
- Limited technological disruption risk, focused on land royalties and water services with stable resource management.
Occidental Petroleum Corporation vs Texas Pacific Land Corporation Positioning
Occidental is a diversified energy company with multiple revenue streams across oil, chemicals, and midstream operations, providing broader business drivers but higher complexity. Texas Pacific Land is concentrated on land management and royalty interests, offering focused exposure but less diversification.
Which has the best competitive advantage?
Texas Pacific Land demonstrates a very favorable moat with strong ROIC above WACC and increasing profitability, indicating a durable competitive advantage. Occidental shows a slightly favorable moat with growing ROIC but still shedding value, suggesting a weaker competitive advantage.
Stock Comparison
The stock price movements over the past 12 months show a stark contrast between Occidental Petroleum Corporation’s significant decline and Texas Pacific Land Corporation’s substantial gains, with both experiencing shifts in trading volume and buyer dominance.
Trend Analysis
Occidental Petroleum Corporation (OXY) experienced a bearish trend over the past year, with a -29.18% price change and accelerating downward momentum, hitting a low of 37.67 before stabilizing recently with slight positive movement.
Texas Pacific Land Corporation (TPL) showed a bullish trend with an 85.66% price increase over the year, though the upward momentum decelerated. Volatility was high, reflected in a 91.94 standard deviation, with prices ranging from 167.98 to 576.67.
Comparing the two, TPL delivered the highest market performance with strong gains, while OXY faced notable losses, highlighting a divergence in investor sentiment and sector dynamics.
Target Prices
Here is the latest verified target price consensus from recognized analysts for the selected companies.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Occidental Petroleum Corporation | 64 | 38 | 49.36 |
| Texas Pacific Land Corporation | 1050 | 1050 | 1050 |
Analysts expect Occidental Petroleum’s stock to trade moderately above its current price of $42.86, indicating potential upside. Texas Pacific Land’s target is significantly higher than its current price of $311.87, suggesting strong bullish sentiment.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Occidental Petroleum Corporation (OXY) and Texas Pacific Land Corporation (TPL):
Rating Comparison
OXY Rating
- Rating: B+, classified as Very Favorable.
- Discounted Cash Flow Score: 5, Very Favorable.
- ROE Score: 3, Moderate.
- ROA Score: 4, Favorable.
- Debt To Equity Score: 1, Very Unfavorable.
- Overall Score: 3, Moderate.
TPL Rating
- Rating: A-, classified as Very Favorable.
- Discounted Cash Flow Score: 4, Favorable.
- ROE Score: 5, Very Favorable.
- ROA Score: 5, Very Favorable.
- Debt To Equity Score: 3, Moderate.
- Overall Score: 4, Favorable.
Which one is the best rated?
Based strictly on the provided data, TPL has a higher overall score and stronger scores in ROE and ROA, with a better rating grade than OXY. However, OXY scores better in discounted cash flow and has a lower debt-to-equity score, indicating differing financial strengths.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Occidental Petroleum Corporation and Texas Pacific Land Corporation:
OXY Scores
- Altman Z-Score: 1.39, in distress zone indicating high bankruptcy risk.
- Piotroski Score: 5, average financial strength rating.
TPL Scores
- Altman Z-Score: 29.77, in safe zone indicating very low bankruptcy risk.
- Piotroski Score: 4, average financial strength rating.
Which company has the best scores?
Based on the provided data, TPL has a significantly stronger Altman Z-Score, placing it in the safe zone, while OXY is in the distress zone. Both have similar average Piotroski Scores, with OXY slightly higher by one point.
Grades Comparison
The grades for Occidental Petroleum Corporation and Texas Pacific Land Corporation from verified grading companies are as follows:
Occidental Petroleum Corporation Grades
The table below summarizes the recent grades from recognized financial institutions for Occidental Petroleum Corporation:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| UBS | Maintain | Neutral | 2025-12-12 |
| B of A Securities | Maintain | Neutral | 2025-12-11 |
| JP Morgan | Downgrade | Underweight | 2025-12-08 |
| Citigroup | Maintain | Neutral | 2025-11-19 |
| Piper Sandler | Maintain | Neutral | 2025-11-18 |
| Susquehanna | Maintain | Positive | 2025-11-13 |
| Wells Fargo | Maintain | Underweight | 2025-11-12 |
| Mizuho | Maintain | Outperform | 2025-11-11 |
| Piper Sandler | Maintain | Neutral | 2025-10-21 |
| Susquehanna | Maintain | Positive | 2025-10-20 |
Overall, Occidental Petroleum Corporation has mostly maintained neutral grades with occasional positive and underweight ratings, indicating mixed analyst sentiment.
Texas Pacific Land Corporation Grades
The table below shows recent grades from credible grading firms for Texas Pacific Land Corporation:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| BWS Financial | Maintain | Buy | 2024-08-12 |
| BWS Financial | Maintain | Buy | 2024-05-10 |
| BWS Financial | Maintain | Buy | 2024-04-02 |
| Stifel | Maintain | Hold | 2024-01-23 |
| Stifel | Maintain | Hold | 2023-11-30 |
| Stifel | Maintain | Hold | 2023-05-22 |
| Stifel | Maintain | Hold | 2023-05-21 |
| Stifel | Maintain | Hold | 2023-04-27 |
| Stifel | Maintain | Hold | 2023-04-26 |
| Stifel | Maintain | Hold | 2023-04-12 |
Texas Pacific Land Corporation has consistently received buy and hold ratings, reflecting a generally stable and positive outlook from analysts.
Which company has the best grades?
Texas Pacific Land Corporation holds better overall grades, with multiple buy ratings compared to Occidental Petroleum’s more mixed neutral and underweight grades. This difference may influence investor confidence and perceived growth potential.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses for Occidental Petroleum Corporation (OXY) and Texas Pacific Land Corporation (TPL) based on their recent financial and operational data.
| Criterion | Occidental Petroleum Corporation (OXY) | Texas Pacific Land Corporation (TPL) |
|---|---|---|
| Diversification | Moderate diversification: Oil & Gas (21.7B), Chemicals (4.9B), Midstream (1.7B) | Focused revenue streams: Oil & Gas Royalties and Water Sales dominant, limited diversification |
| Profitability | Net margin 11.23%, ROIC 5.48% (neutral), ROE 8.91% (unfavorable) | High profitability: Net margin 64.32%, ROIC 35.6%, ROE 40.09% (all favorable) |
| Innovation | No significant innovation moat; profitability growing but value shedding | Demonstrates durable competitive advantage with growing ROIC and value creation |
| Global presence | Global operations in oil & gas and chemical sectors | Primarily focused on Texas land and royalties, limited global exposure |
| Market Share | Large player in oil & gas with significant asset base | Niche player with strong control over land and royalties in Texas |
Key takeaways: Texas Pacific Land (TPL) stands out with strong profitability, a durable competitive advantage, and a favorable financial profile, while Occidental Petroleum (OXY) shows improving profitability but still faces challenges in value creation and operational efficiency. TPL’s niche focus provides stability, whereas OXY’s diversification exposes it to more market volatility.
Risk Analysis
Below is a comparative table of key risks for Occidental Petroleum Corporation (OXY) and Texas Pacific Land Corporation (TPL) based on the most recent data from 2024:
| Metric | Occidental Petroleum Corporation (OXY) | Texas Pacific Land Corporation (TPL) |
|---|---|---|
| Market Risk | Low beta (0.38) indicates lower volatility; oil price fluctuations remain a concern | Moderate beta (0.935) indicates average market sensitivity; diversified revenue from land and water services |
| Debt level | Moderate debt-to-equity ratio (0.79), interest coverage at 4.46x; some financial leverage risk | Virtually no debt (debt-to-equity 0.0), very strong balance sheet with infinite interest coverage |
| Regulatory Risk | Exposure to environmental and energy regulations in multiple regions, including the U.S. and Middle East | Regulatory risk mainly from land use and water management policies in Texas; generally lower complexity |
| Operational Risk | Complex operations with oil and chemical segments, potential for production disruptions | Operational risk tied to land management and water services; smaller workforce and simpler operations |
| Environmental Risk | High due to fossil fuel extraction, potential liabilities from environmental impact | Moderate; land and water management with some environmental stewardship responsibilities |
| Geopolitical Risk | Significant exposure in Middle East and Africa, vulnerable to regional instability | Low geopolitical risk, focused primarily on U.S. land assets |
Occidental’s most impactful risks are its moderate leverage combined with exposure to volatile oil markets and geopolitical tensions abroad. Texas Pacific Land benefits from a strong balance sheet and lower operational complexity but faces regulatory risks related to land and water resource management. Investors should carefully weigh Occidental’s financial distress signals against Texas Pacific Land’s premium valuation and environmental dependencies.
Which Stock to Choose?
Occidental Petroleum (OXY) shows a favorable income statement overall, despite recent declines in revenue and profitability. Its financial ratios are mixed with some favorable metrics but also notable weaknesses in liquidity and asset turnover. The company carries moderate debt, and its rating is very favorable (B+).
Texas Pacific Land (TPL) has strong income growth and profitability with mostly favorable financial ratios, especially in return metrics and low debt levels. It exhibits a solid competitive advantage and carries a very favorable rating (A-), supported by excellent liquidity and low financial risk.
Investors seeking growth and stability might find TPL more attractive due to its very favorable rating and strong financial performance, while those focusing on value and recovering profitability could interpret OXY’s mixed ratios and slight moat as a developing opportunity. The choice could depend on one’s risk tolerance and investment horizon.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Occidental Petroleum Corporation and Texas Pacific Land Corporation to enhance your investment decisions:
