Occidental Petroleum’s (NYSE: OXY) stock price correction hit bottom in April, and the rebound gained momentum in May after a solid earnings beat. Headwinds exist for this and other energy companies, but their leaning into increased production and operational quality is paying off. The Q1 results highlight this company’s efficiency efforts and indicate that gains will be sticky and cash flow will remain robust.
[content-module:CompanyOverview|NYSE:OXY]Cash flow is critical to this investment thesis because it is improving, allowing for substantial debt reductions and rapidly improving shareholder value. Debt reduction in Q1 topped $2.3 billion and left the cash balance and equity up compared to the prior year. Because cash flow is robust and debt is falling, investors can expect this company’s shareholder value to continue improving, and the capital return to increase over time.
