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EOG or OXY: Which Oil & Gas Stock Has Better Long-Term Potential?
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Key Takeaways
EOG Resources' earnings estimates rose for 2025 and 2026, while OXY's 2026 forecast declined.
EOG shows a stronger ROE at 22.35% and a lower debt-to-capital ratio of 10.5% than OXY.
EOG offers a higher dividend yield of 3.21%, topping OXY's 2.11% and the S&P 500s 1.45%.
The companies operating in the Zacks Oil-Energy sector offer a compelling long-term investment opportunity, underpinned by abundant shale reserves, advanced extraction technologies, and steady global energy demand. Innovations like hydraulic fracturing and horizontal drilling have unlocked vast unconventional resources, positioning the United States as a global leader in oil and natural gas production and exports.
As energy security takes center stage, U.S. exploration and production companies gain from strategic geopolitical positioning and expanding LNG export markets. A strong focus on capital discipline and cost optimization has enhanced free cash flow generation. Ongoing industry consolidation and operational efficiencies continue to strengthen the sector’s ability to deliver stable earnings and long-term shareholder value, even amid price volatility. Amid such a backdrop, let’s focus on EOG Resources (EOG - Free Report) and Occidental Petroleum (OXY - Free Report) , both prominent U.S. independent oil and gas producers with strong shale portfolios.
Occidental Petroleum presents a strong investment case, supported by its diversified asset portfolio, robust free cash flow generation and strategic commitment to low-carbon initiatives. With a dominant presence in the Permian Basin and valuable international assets, the company continues to deliver resilient production and stable earnings. Occidental’s prudent capital allocation, ongoing debt reduction, and significant investments in carbon capture technologies enhance its long-term growth prospects, making it a compelling choice for energy-focused investors. Occidental’s global upstream footprint plays a pivotal role in driving its growth and resilience.
EOG Resources stands out as one of the most efficient and technologically advanced shale producers in the United States, with a high-quality, low-decline asset base concentrated in premier regions such as the Delaware Basin and Eagle Ford. Known for exceptional well productivity and disciplined capital management, EOG consistently delivers strong free cash flow across a range of commodity price cycles. The company’s solid balance sheet and conservative financial approach support a resilient shareholder return strategy. With a strong focus on innovation, operational efficiency, and emissions reduction, EOG is well-positioned to deliver long-term value in the evolving energy landscape.
Both of these stocks are prominent players in the oil and gas sector. Let’s take a closer look at their fundamental metrics to assess how they stack up against each other and determine which one presents a more attractive investment opportunity.
EOG & OXY’s Earnings Projections
The Zacks Consensus Estimate for EOG Resources’ earnings indicates an increase of 7.29% for 2025 and 11.94% for 2026 in the past 60 days. Long-term (three to five years) earnings growth per share is pegged at 1.3%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Occidental Petroleum’s earnings indicates an increase of 3.62% for 2025 and a decline of 7.14% for 2026 in the past 60 days.
Image Source: Zacks Investment Research
EOG & OXY’s Dividend Yield
Dividends are regular payments made by a company to its shareholders and represent a direct way for investors to earn a return on their investment. They are an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings.
Currently, the dividend yield for EOG Resources is 3.21%, while the same for Occidental Petroleum is 2.11%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.45%.
Debt to Capital
EOG Resources’ debt to capital currently stands at 13.85% compared with Occidental Petroleum’s debt to capital of 42.17%. EOG debt to capital is better than the S&P 500 level of 38.40%. It indicates EOG is utilizing much less debt to run its operations.
Image Source: Zacks Investment Research
Valuation
EOG Resources currently appears to be cheaper compared with Occidental Petroleum on trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA).
EOG is currently trading at 5.29X, while OXY is trading at 5.3X, compared with their sector’s 4.89X.
Return on Equity (ROE)
ROE is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value.
OXY’s current ROE is 16.6% compared with EOG’s ROE of 22.35%, both outperforming the sector’s ROE of 14.73%.
Capital Expenditure Plan
Capital expenditure plays a vital role in the oil and gas industry, fueling exploration, development, and the upkeep of key energy assets necessary for sustained production and long-term revenue growth. Companies allocate funds to infrastructure and advanced technologies to boost operational efficiency and minimize environmental impact. The potential for further reductions in the second half of the year stands to benefit oil and gas firms by lowering borrowing costs and supporting investment.
OXY plans to invest in the range of and aims to invest in the range of $7.2-$7.4 billion in 2025 to further strengthen its existing operation.
EOG Resources’ 2025 capital expenditures are projected to be between $5.8 billion and $6.2 billion. This estimate covers exploration and development drilling, facilities, leasehold acquisitions, capitalized interest, dry hole costs, and other property, plant and equipment.
Conclusion
EOG Resources and Occidental Petroleum are strategically investing in their infrastructure to expand operations and cater to the rising global demand for hydrocarbons.
EOG Resources' extensive reach to key shale resources like the Permian and Eagle Ford will support long-term production growth. EOG’s positive movement in earnings estimate, better ROE, lower debt to capital and higher dividend yield make it a better choice in the oil and energy space.
Image: Bigstock
EOG or OXY: Which Oil & Gas Stock Has Better Long-Term Potential?
Key Takeaways
The companies operating in the Zacks Oil-Energy sector offer a compelling long-term investment opportunity, underpinned by abundant shale reserves, advanced extraction technologies, and steady global energy demand. Innovations like hydraulic fracturing and horizontal drilling have unlocked vast unconventional resources, positioning the United States as a global leader in oil and natural gas production and exports.
As energy security takes center stage, U.S. exploration and production companies gain from strategic geopolitical positioning and expanding LNG export markets. A strong focus on capital discipline and cost optimization has enhanced free cash flow generation. Ongoing industry consolidation and operational efficiencies continue to strengthen the sector’s ability to deliver stable earnings and long-term shareholder value, even amid price volatility. Amid such a backdrop, let’s focus on EOG Resources (EOG - Free Report) and Occidental Petroleum (OXY - Free Report) , both prominent U.S. independent oil and gas producers with strong shale portfolios.
Occidental Petroleum presents a strong investment case, supported by its diversified asset portfolio, robust free cash flow generation and strategic commitment to low-carbon initiatives. With a dominant presence in the Permian Basin and valuable international assets, the company continues to deliver resilient production and stable earnings. Occidental’s prudent capital allocation, ongoing debt reduction, and significant investments in carbon capture technologies enhance its long-term growth prospects, making it a compelling choice for energy-focused investors. Occidental’s global upstream footprint plays a pivotal role in driving its growth and resilience.
EOG Resources stands out as one of the most efficient and technologically advanced shale producers in the United States, with a high-quality, low-decline asset base concentrated in premier regions such as the Delaware Basin and Eagle Ford. Known for exceptional well productivity and disciplined capital management, EOG consistently delivers strong free cash flow across a range of commodity price cycles. The company’s solid balance sheet and conservative financial approach support a resilient shareholder return strategy. With a strong focus on innovation, operational efficiency, and emissions reduction, EOG is well-positioned to deliver long-term value in the evolving energy landscape.
Both of these stocks are prominent players in the oil and gas sector. Let’s take a closer look at their fundamental metrics to assess how they stack up against each other and determine which one presents a more attractive investment opportunity.
EOG & OXY’s Earnings Projections
The Zacks Consensus Estimate for EOG Resources’ earnings indicates an increase of 7.29% for 2025 and 11.94% for 2026 in the past 60 days. Long-term (three to five years) earnings growth per share is pegged at 1.3%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Occidental Petroleum’s earnings indicates an increase of 3.62% for 2025 and a decline of 7.14% for 2026 in the past 60 days.
Image Source: Zacks Investment Research
EOG & OXY’s Dividend Yield
Dividends are regular payments made by a company to its shareholders and represent a direct way for investors to earn a return on their investment. They are an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings.
Currently, the dividend yield for EOG Resources is 3.21%, while the same for Occidental Petroleum is 2.11%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.45%.
Debt to Capital
EOG Resources’ debt to capital currently stands at 13.85% compared with Occidental Petroleum’s debt to capital of 42.17%. EOG debt to capital is better than the S&P 500 level of 38.40%. It indicates EOG is utilizing much less debt to run its operations.
Image Source: Zacks Investment Research
Valuation
EOG Resources currently appears to be cheaper compared with Occidental Petroleum on trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA).
EOG is currently trading at 5.29X, while OXY is trading at 5.3X, compared with their sector’s 4.89X.
Return on Equity (ROE)
ROE is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value.
OXY’s current ROE is 16.6% compared with EOG’s ROE of 22.35%, both outperforming the sector’s ROE of 14.73%.
Capital Expenditure Plan
Capital expenditure plays a vital role in the oil and gas industry, fueling exploration, development, and the upkeep of key energy assets necessary for sustained production and long-term revenue growth. Companies allocate funds to infrastructure and advanced technologies to boost operational efficiency and minimize environmental impact. The potential for further reductions in the second half of the year stands to benefit oil and gas firms by lowering borrowing costs and supporting investment.
OXY plans to invest in the range of and aims to invest in the range of $7.2-$7.4 billion in 2025 to further strengthen its existing operation.
EOG Resources’ 2025 capital expenditures are projected to be between $5.8 billion and $6.2 billion. This estimate covers exploration and development drilling, facilities, leasehold acquisitions, capitalized interest, dry hole costs, and other property, plant and equipment.
Conclusion
EOG Resources and Occidental Petroleum are strategically investing in their infrastructure to expand operations and cater to the rising global demand for hydrocarbons.
EOG Resources' extensive reach to key shale resources like the Permian and Eagle Ford will support long-term production growth. EOG’s positive movement in earnings estimate, better ROE, lower debt to capital and higher dividend yield make it a better choice in the oil and energy space.
Based on the above discussion, EOG currently has an edge over OXY, despite the stocks carrying a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.