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a minute ago
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This Top Warren Buffett Stock Continues to Deliver an Impressive Performance
Key Points Occidental Petroleum is one of Berkshire Hathaway's largest holdings. The oil company recently reported solid second-quarter results. It's making excellent progress on its plans to repay debt and grow shareholder value. 10 stocks we like better than Occidental Petroleum › Warren Buffett's company, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), continues to be a big believer in Occidental Petroleum (NYSE: OXY). It's easy to see why when looking at the oil giant's recently reported second-quarter results. The company delivered strong performance across the board despite lower oil and gas prices during the period. This consistent execution, even amid market volatility, gives Occidental Petroleum a solid foundation to grow shareholder value for Berkshire Hathaway and other investors in the years ahead. Drilling down into Occidental Petroleum's second-quarter results Occidental Petroleum produced $396 million, or $0.39 per share, of adjusted income during the second quarter. That was down from the $860 million, or $0.87 per share, it earned in the first quarter. The culprit was lower commodity prices. Occidental posted $934 million of pre-tax income in its oil and gas segment, down from $1.7 billion in the first quarter, due primarily to lower oil and gas prices. The average global price of crude oil was 10% below the first quarter's level, while the price of domestic natural gas tumbled 45%. Despite these lower prices, Occidental delivered higher volumes and strong results from its midstream and marketing segment. The company produced 1.4 million barrels of oil equivalent (BOE) per day, exceeding the mid-point of its guidance, while midstream and marketing earnings came in above the high-end of expectations. The company's chemicals business (OxyChem) also delivered solid results that were on par with its first-quarter performance. Additionally, strong well performance and enhanced operational efficiency supported robust cash generation. Operating cash flow before working capital adjustments was $2.6 billion, and free cash flow totaled $700 million, both slightly lower than the previous quarter. More progress on its debt-reduction plan Occidental Petroleum used its healthy free cash flow to pay its dividend and reduce debt. The company also continued to sell noncore assets to accelerate its debt-reduction efforts. It has secured $950 million of additional asset sales since the start of the second quarter. Those sales included $370 million of noncore and select non-operating Permian Basin upstream assets that closed during the quarter. Occidental also recently agreed to sell some gas-gathering assets in the Midland Basin to midstream company Enterprise Products Partners for $580 million. Those sales added to the $1.3 billion of noncore-asset sales it closed during the first quarter. The company has now agreed to sell $4 billion of assets since announcing its deal for CrownRock in late 2023, which has it closing in on the low end of its $4.5 billion to $6 billion target range. The energy company has used a combination of excess free cash and asset-sale proceeds to repay $3 billion of debt so far this year. Since July 2024, it has retired $7.5 billion of debt, saving it $410 million in annual interest expenses. The company has now significantly exceeded its target of delivering at least $4.5 billion of debt reduction within a year of closing its CrownRock deal. More positive catalysts ahead Occidental expects to continue using its excess free cash flow after paying dividends and noncore-asset sales to repay debt. It still has approximately $1.6 billion of 2026 debt maturities to address, as well as another $1.5 billion coming due in 2027. The company shouldn't have a problem paying off that debt, given the anticipated surge in its free cash flow from non-oil sources. The company estimates that a combination of interest expense savings, incremental earnings from upcoming chemicals projects, and midstream contract expirations will boost its free cash flow by $1 billion in 2026 and by an additional $500 million in 2027. As its debt continues to fall, Occidental will be positioned to return more cash to investors, beyond its dividend. It plans to eventually resume share repurchases and the redemption of Berkshire's preferred equity investment that it made in 2019 to support the company's acquisition of Anadarko Petroleum. A well-oiled machine Warren Buffett's Berkshire Hathaway has made a major bet on Occidental's ability to execute its plans to grow shareholder value. The company owns nearly 27% of the oil company's outstanding shares. That position is worth almost $12 billion (approximately 4% of Berkshire's investment portfolio), making it the seventh-largest holding. Occidental's strong second-quarter showing and progress on its debt-reduction plan prove that Buffett's company has made a smart investment. The oil company is in an excellent position to grow shareholder value in the future, despite the continued volatility of crude oil prices. Should you buy stock in Occidental Petroleum right now? Before you buy stock in Occidental Petroleum, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Occidental Petroleum wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,119,863!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Matt DiLallo has positions in Berkshire Hathaway and Enterprise Products Partners. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Enterprise Products Partners and Occidental Petroleum. The Motley Fool has a disclosure policy. This Top Warren Buffett Stock Continues to Deliver an Impressive Performance was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
31 minutes ago
- Yahoo
Popular 19th century pub with rave reviews is sold to new landlord
A popular pub which dates back to the 19th century has officially been sold. The John O'Gaunt, which is based along Bridge Street in Hungerford, had been owned by landlord Mark Genders, but he opted to sell the boozer after he decided to relocate back to Kenya, the country of his birth. The pub is now under the stewardship of entrepreneur Rahul Sood, who arrives in Berkshire with a wealth of experience from his portfolio of businesses, which includes care homes, florists, and restaurants. Specialist business property adviser, Christie & Co, conducted the sale. Following the change of hands, Mr Genders said: 'The John O'Gaunt has been a huge part of our lives, and we're proud of what we've built here. 'We're delighted to be passing it on to someone who shares our passion for hospitality and community.' The new man at the helm, Mr Sood, added: 'We'll be carrying out a light refurbishment, refreshing the food and drink offering, and making sure the pub continues to be a vibrant part of the local community.' On Google, the pub boasts an average score of 4.5/5 from 611 reviews. Tim Widdows, Associate Director at Christie & Co, who handled the sale, added, 'We received a great deal of interest in the John O'Gaunt, with buyers recognising the fantastic potential of the business. 'It's a pleasure to have helped bring together a deal that ensures the pub's future is in safe hands.' The John O'Gaunt leasehold was sold for an undisclosed sum.
Yahoo
an hour ago
- Yahoo
At 207%, the Warren Buffett indicator says the stock market could crash!
Billionaire investor Warren Buffett has shared a lot of wisdom throughout his successful career. However, one gem to come off his desk is the Buffett Indicator – a simple comparison of the US stock market's total value divided by US GDP. As Buffett puts it, the indicator is 'probably the best single measure of where valuations stand at any given moment'. And for value investors, knowing when the stock market is overpriced is a powerful advantage, even when relying only on index funds. However, looking at the Buffett Indicator today might cause some concern. US stocks are expensive Historically, his Indicator has sat between 90% and 135%. This healthy range generally indicates that US stocks are fairly-to-slightly overvalued and presents an ideal window of opportunity to top up on investments. But following the tremendous artificial intelligence (AI)-driven returns of 2023 and 2024, the indicator's been rising. So much so that it now sits at a whopping 207%! That's the highest it's ever been since records began in the 1970s. And it's even higher than the 194% peak seen in late 2021, right before US stocks experienced one of the most severe market corrections seen in over a decade. That would certainly explain why Buffett and his team at investment vehicle Berkshire Hathaway have been busy selling stocks lately. In fact, the firm just marked its 11th consecutive quarter of being a net seller, with positions such as Bank of America, Citigroup, and Capital One all getting trimmed, or outright sold off. So could another stock market downturn be just around the corner? Panic isn't a strategy The stretched valuation of US stocks definitely creates cause for concern. However, there's no guarantee a crash or correction will actually materialise. Therefore, panic selling everything today likely isn't a sensible strategy, and it's why Buffett, despite higher selling activity, still has plenty of capital invested in the US stock market. In fact, he recently added $549m of Domino's Pizza (NASDAQ:DPZ) to its investment portfolio. His investment thesis is relatively simple. As the world's largest pizza delivery company, Domino's runs a 99% franchised business model. Combining this with its recurring ingredient & supply chain revenue and its high-margin royalty income, the business is highly cash generative. And what's more, the firm's proven to be quite recession-resistant since people tend to eat pizza during both the good times and the bad. Of course, Buffett still highlighted some notable risks. Rising labour and ingredient prices do put pressure on profit margins, and the general shift towards healthier dining could erode demand over time. Nevertheless, he sees ample long-term potential for steady gains here. And given his track record of success, investors may want to take a closer look. Will the stock market crash in 2025? There's no way of knowing whether the stock market will take a nosedive later this year. Even with the Buffett Indicator at sky-high levels, Berkshire's investment in Domino's suggests there are still bargains to be found among US stocks. Therefore, investors could be well served to follow in Buffett's footsteps, not by panic-selling, but by trimming overvalued positions to maintain portfolio diversification and hunting for hidden bargains. The post At 207%, the Warren Buffett indicator says the stock market could crash! appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data