With a robust portfolio of upstream assets located in the United States, Middle East, and Latin America as well as a strong pipeline business, Petroleum (NYSE: OXY) stands as a leading energy stock and one of the core holdings in the Berkshire Hathaway portfolio. In fact, Occidental Petroleum provides about $56 million ($224 million annualized) in quarterly dividend income to Berkshire Hathaway from its ownership of the energy company's common stock alone.

But just because the stock has received the Warren Buffett seal of approval doesn't make it an automatic buy. Let's investigate Occidental's dividend a little further for a better understanding of the payout.

Driven by strong performance from its U.S. onshore assets as well as its midstream and OxyChem businesses, Occidental Petroleum reported free cash flow of more than $700 million in the first quarter of 2024. This more than covered the $332 million that the company paid out in dividends on its common and preferred stocks. The quarterly dividend payment on its common stock totaled $0.22 per share in the first quarter, and it will be the same for the upcoming dividend payment on Oct. 15. Currently, this translates to a forward dividend yield of about 1.5% for Occidental Petroleum stock.

Continue reading

Source Fool.com