Why Warren Buffett Loves Occidental Stock And What It Means For Chevron

Group 1 - Occidental Petroleum Corp. (OXY) has seen a decline of 13.4% in 2024 and over 20% in the last 12 months, yet Berkshire Hathaway continues to increase its stake, owning approximately 29% of OXY with regulatory approval to buy up to 50% [1] - Warren Buffett has sold 4.3 million shares of Chevron Corp. (CVX) in the last quarter and has sold CVX stock on seven occasions since Q4 2022, totaling 73.08 million shares [1] - The International Energy Agency (IEA) projects that fossil fuel demand will peak in 2030, indicating a shift towards renewable energy solutions [1][2] Group 2 - Buffett's preference for OXY is influenced by the company's significant debt reduction of over 50% since its $55 billion acquisition of Anadarko in 2019, alongside expectations of higher oil prices [3][4] - OXY generates most of its revenue from upstream drilling, making it more sensitive to oil price increases compared to Chevron [3] - Berkshire Hathaway's investment in OXY includes $10 billion in preferred stock with an 8% annual yield and warrants to purchase up to 80 million shares of OXY common stock [4] Group 3 - The article emphasizes that liking OXY does not equate to disliking Chevron, as Buffett has invested in both companies, with Berkshire owning approximately 6% of CVX stock [5][6] - The combined holdings of OXY and CVX represent about 10% of Berkshire Hathaway's portfolio, with only Apple Inc. having a higher percentage [7] - For income investors, Chevron offers a more attractive dividend yield of 4.38%, which has been growing at an annualized rate of 5.38% over the last three years [8]