Head to Head Review: Cactus (NYSE:WHD) versus Occidental Petroleum (NYSE:OXY)

Cactus (NYSE:WHD) and Occidental Petroleum (NYSE:OXY) are both energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.

Earnings & Valuation

This table compares Cactus and Occidental Petroleum”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cactus	$1.14 billion	3.18	$185.41 million	$2.81	16.11
Occidental Petroleum	$26.88 billion	1.61	$3.06 billion	$2.46	17.83

Occidental Petroleum has higher revenue and earnings than Cactus. Cactus is trading at a lower price-to-earnings ratio than Occidental Petroleum, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Cactus and Occidental Petroleum, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cactus	1	3	2	0	2.17
Occidental Petroleum	2	14	5	0	2.14

Cactus currently has a consensus price target of $52.33, suggesting a potential upside of 15.60%. Occidental Petroleum has a consensus price target of $53.38, suggesting a potential upside of 21.68%. Given Occidental Petroleum’s higher possible upside, analysts clearly believe Occidental Petroleum is more favorable than Cactus.

Institutional & Insider Ownership

85.1% of Cactus shares are owned by institutional investors. Comparatively, 88.7% of Occidental Petroleum shares are owned by institutional investors. 13.8% of Cactus shares are owned by insiders. Comparatively, 0.3% of Occidental Petroleum shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Cactus has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, Occidental Petroleum has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Profitability

This table compares Cactus and Occidental Petroleum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cactus	16.78%	18.99%	13.76%
Occidental Petroleum	11.20%	16.60%	5.18%

Dividends

Cactus pays an annual dividend of $0.52 per share and has a dividend yield of 1.1%. Occidental Petroleum pays an annual dividend of $0.96 per share and has a dividend yield of 2.2%. Cactus pays out 18.5% of its earnings in the form of a dividend. Occidental Petroleum pays out 39.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cactus has raised its dividend for 4 consecutive years and Occidental Petroleum has raised its dividend for 5 consecutive years. Occidental Petroleum is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Cactus beats Occidental Petroleum on 9 of the 17 factors compared between the two stocks.

About Cactus

Cactus, Inc., together with its subsidiaries, designs, manufactures, sells, and leases pressure control and spoolable pipes in the United States, Australia, Canada, the Middle East, and internationally. It operates through two segments, Pressure Control and Spoolable Technologies. The Pressure Control segment designs, manufactures, sells, and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand name through service centers. Its products are sold and rented primarily for onshore unconventional oil and gas wells for drilling, completion, and production phases of the wells. This segment also provides field services to install, maintain, and handle the equipment. The Spoolable Technologies segment designs, manufactures, and sells spoolable pipes and associated end fittings under the FlexSteel brand name. Its products are primarily used to transport oil, gas, and other liquids. This segment also provides field services and rental items through service centers and pipe yards, as well as offers equipment and services internationally. In addition, the company offers repair and refurbishment services. Cactus, Inc. was founded in 2011 and is headquartered in Houston, Texas.

About Occidental Petroleum

Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, and North Africa. It operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing. The company's Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas. Its Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride; and vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also invests in entities. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.