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OXY vs. CNQ: Which Oil & Gas Stock Currently Offers Better Returns?
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Key Takeaways
CNQ outperformed with a 15.1% gain over six months compared with OXY's 1.4% decline.
CNQ has a lower debt-to-capital ratio of 29.91% versus OXY's 37.93%, signaling more conservative leverage.
CNQ's ROE stands at 18.93% and dividend yield at 4.59%, both surpassing OXY's 12.35% ROE and 2.15% yield.
The companies operating in the Zacks Oil-Energy sector offer a compelling long-term investment outlook, underpinned by extensive shale reserves, sophisticated extraction technologies and sustained global energy demand. Innovations like hydraulic fracturing and horizontal drilling have unlocked vast unconventional resources and the operators in this sector have benefited from the same.
As energy security becomes increasingly critical, oil and gas exploration and production companies are gaining from their favorable geopolitical positioning and the rapid expansion of LNG export markets. Prudent capital allocation and tighter cost controls have strengthened free cash flow, while industry consolidation and operational improvements are supporting more resilient earnings and sustainable shareholder returns despite commodity price volatility.
Amid such a backdrop, let’s focus on Occidental Petroleum (OXY - Free Report) and Canadian Natural Resources Limited (CNQ - Free Report) as both companies having diverse portfolio of assets.
Occidental Petroleum offers a compelling investment case, underpinned by a diversified asset base, strong free cash flow and a growing focus on low-carbon solutions. Its leading Permian Basin position, complemented by international operations, supports steady production and earnings, while disciplined capital allocation, debt reduction and investments in carbon capture strengthen long-term growth prospects.
Canadian Natural Resources offers a strong long-term investment case, anchored by a diversified portfolio of low-risk, long-life assets across oil sands, conventional oil and gas, and offshore operations. Its balanced asset base supports stable production, low decline rates and cost predictability through commodity cycles. Strategic acquisitions have strengthened scale and asset quality, while operational efficiency and disciplined capital allocation drive robust free cash flow and dependable shareholder returns.
Both companies are leading names in the oil and gas sector. Examining their fundamental metrics more closely will help highlight how they compare and identify which stock offers the stronger investment opportunity.
CNQ & OXY’s Earnings Projections
The Zacks Consensus Estimate for Canadian Natural Resources’ earnings indicates a decline of 4.41% for 2026 in the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Occidental Petroleum’s earnings indicates a decline of 51.3% for 2026 in the past 60 days.
Image Source: Zacks Investment Research
Debt to Capital
Oil and Energy companies typically maintain high debt levels because of the industry’s capital-intensive requirements. Large upfront investments are needed for exploration, infrastructure development and major projects. Firms also rely on leverage to navigate commodity price swings, support acquisitions and uphold shareholder returns in volatile market conditions.
Canadian Natural Resources’ debt to capital currently stands at 29.91% compared with Occidental Petroleum’s 37.93%. This indicates CNQ is utilizing much less debt to run its operations.
Image Source: Zacks Investment Research
Return on Equity
Return on Equity (“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 12.35% compared with CNQ’s 18.93%. This indicates that CNQ is utilizing shareholders’ funds far more efficiently than its peers.
Image Source: Zacks Investment Research
Valuation
Occidental Petroleum currently appears to be cheaper compared with Canadian Natural Resources on trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA).
OXY and CNQ are currently trading at 5.43X and 6.5X, respectively, compared with their sector’s 5.07X.
Image Source: Zacks Investment Research
CNQ & 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. It is an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings.
Currently, the dividend yield for Canadian Natural Resources is 4.59%, while the same for Occidental is 2.15%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.36%.
Price Performance
In the past six months, Occidental Petroleum’s shares have lost 1.4% against Canadian Natural Resources’ rally of 15.1% and the Oil-Energy sector’s return of 10.8%.
Price Performance (Six months)
Image Source: Zacks Investment Research
Conclusion
Occidental Petroleum and Canadian Natural Resources are strategically investing in their infrastructure to expand operations and cater to the rising global demand for hydrocarbons.
Based on the above discussion, it appears CNQ has a clear edge over OXY, despite the latter having a cheaper valuation. Canadian Natural Resources’ stronger ROE, relatively lower debt usage, better dividend yield and price performance, along with the Zacks Rank #3 (Hold), turn the tide in its favor, while Occidental Petroleum currently has a Zacks Rank #4 (Sell).
Image: Bigstock
OXY vs. CNQ: Which Oil & Gas Stock Currently Offers Better Returns?
Key Takeaways
The companies operating in the Zacks Oil-Energy sector offer a compelling long-term investment outlook, underpinned by extensive shale reserves, sophisticated extraction technologies and sustained global energy demand. Innovations like hydraulic fracturing and horizontal drilling have unlocked vast unconventional resources and the operators in this sector have benefited from the same.
As energy security becomes increasingly critical, oil and gas exploration and production companies are gaining from their favorable geopolitical positioning and the rapid expansion of LNG export markets. Prudent capital allocation and tighter cost controls have strengthened free cash flow, while industry consolidation and operational improvements are supporting more resilient earnings and sustainable shareholder returns despite commodity price volatility.
Amid such a backdrop, let’s focus on Occidental Petroleum (OXY - Free Report) and Canadian Natural Resources Limited (CNQ - Free Report) as both companies having diverse portfolio of assets.
Occidental Petroleum offers a compelling investment case, underpinned by a diversified asset base, strong free cash flow and a growing focus on low-carbon solutions. Its leading Permian Basin position, complemented by international operations, supports steady production and earnings, while disciplined capital allocation, debt reduction and investments in carbon capture strengthen long-term growth prospects.
Canadian Natural Resources offers a strong long-term investment case, anchored by a diversified portfolio of low-risk, long-life assets across oil sands, conventional oil and gas, and offshore operations. Its balanced asset base supports stable production, low decline rates and cost predictability through commodity cycles. Strategic acquisitions have strengthened scale and asset quality, while operational efficiency and disciplined capital allocation drive robust free cash flow and dependable shareholder returns.
Both companies are leading names in the oil and gas sector. Examining their fundamental metrics more closely will help highlight how they compare and identify which stock offers the stronger investment opportunity.
CNQ & OXY’s Earnings Projections
The Zacks Consensus Estimate for Canadian Natural Resources’ earnings indicates a decline of 4.41% for 2026 in the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Occidental Petroleum’s earnings indicates a decline of 51.3% for 2026 in the past 60 days.
Image Source: Zacks Investment Research
Debt to Capital
Oil and Energy companies typically maintain high debt levels because of the industry’s capital-intensive requirements. Large upfront investments are needed for exploration, infrastructure development and major projects. Firms also rely on leverage to navigate commodity price swings, support acquisitions and uphold shareholder returns in volatile market conditions.
Canadian Natural Resources’ debt to capital currently stands at 29.91% compared with Occidental Petroleum’s 37.93%. This indicates CNQ is utilizing much less debt to run its operations.
Image Source: Zacks Investment Research
Return on Equity
Return on Equity (“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 12.35% compared with CNQ’s 18.93%. This indicates that CNQ is utilizing shareholders’ funds far more efficiently than its peers.
Image Source: Zacks Investment Research
Valuation
Occidental Petroleum currently appears to be cheaper compared with Canadian Natural Resources on trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA).
OXY and CNQ are currently trading at 5.43X and 6.5X, respectively, compared with their sector’s 5.07X.
Image Source: Zacks Investment Research
CNQ & 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. It is an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings.
Currently, the dividend yield for Canadian Natural Resources is 4.59%, while the same for Occidental is 2.15%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.36%.
Price Performance
In the past six months, Occidental Petroleum’s shares have lost 1.4% against Canadian Natural Resources’ rally of 15.1% and the Oil-Energy sector’s return of 10.8%.
Price Performance (Six months)
Image Source: Zacks Investment Research
Conclusion
Occidental Petroleum and Canadian Natural Resources are strategically investing in their infrastructure to expand operations and cater to the rising global demand for hydrocarbons.
Based on the above discussion, it appears CNQ has a clear edge over OXY, despite the latter having a cheaper valuation. Canadian Natural Resources’ stronger ROE, relatively lower debt usage, better dividend yield and price performance, along with the Zacks Rank #3 (Hold), turn the tide in its favor, while Occidental Petroleum currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.