The companies belonging to the Zacks Oil & Energy sector continue to present an attractive long-term investment opportunity, supported by abundant shale resources, advanced extraction technologies and steady global energy demand. Technological advancements such as hydraulic fracturing and horizontal drilling have unlocked vast unconventional reserves, creating significant growth opportunities for industry participants.
With energy security becoming increasingly important, particularly amid recent tensions in the Middle East, exploration and production companies with strong domestic and international operations are well positioned to benefit from higher oil and gas prices and the ongoing expansion of LNG export markets. At the same time, disciplined capital allocation and stronger cost controls have improved free cash flow generation, while industry consolidation and operational efficiencies continue to support more stable earnings and consistent shareholder returns despite commodity price volatility.
Amid such a backdrop, let’s focus on Occidental Petroleum OXY and TotalEnergies SE TTE as both companies have a diverse portfolio of assets.
Occidental Petroleum offers a compelling investment opportunity, backed by its diversified asset base, strong free cash flow generation and growing focus on low-carbon initiatives. The company’s solid presence in the Permian Basin, complemented by its international operations, supports stable production growth and earnings performance. In addition, disciplined capital allocation, continued debt reduction efforts and strategic investments in carbon capture projects strengthen Occidental Petroleum’s long-term growth prospects.
TotalEnergies presents a compelling investment case supported by strong production growth, diversified global assets and disciplined capital allocation. The company continues to benefit from new project startups across Brazil, the United States, Denmark, Angola and Libya, while expanding its LNG business and renewable energy portfolio. TotalEnergies is also advancing its net-zero ambitions, with renewable generation capacity reaching 35.6 GW in first-quarter 2026. Despite disruptions in parts of the Middle East, higher oil prices and growth from other regions are expected to offset the impact. Strong cash flow generation, healthy liquidity, declining leverage and ongoing share buybacks further strengthen the company’s long-term outlook.
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.
OXY & TTE’s Earnings Growth Projections
The Zacks Consensus Estimate for TotalEnergies’ 2026 earnings per share indicates an increase of 24.76% in the past 60 days.
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The same for Occidental Petroleum’s 2026 earnings per share indicates an increase of 62.01% in the past 60 days.
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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 9.65% compared with TTE’s 14.01%.
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Debt to Capital
The Oil and Gas industry is a capital-intensive industry and the companies operating in this space often borrow funds to run their operations.
Occidental Petroleum’s debt to capital currently stands at 28.37% compared with TotalEnergies’ 33.82%. It shows OXY is successfully running its operations utilizing fewer debts compared with TTE. OXY has decided to reduce more debts in the coming months to further strengthen its balance sheet.
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Valuation
Occidental Petroleum currently appears to trade at a premium compared with TotalEnergies on trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA).
OXY is currently trading at 6.26X, while TTE is trading at 5.93X.
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TTE & OXY’s Capital Return Program
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 TotalEnergies is 1.70%, while the same for Occidental Petroleum is 1.83%.
Price Performance
TotalEnergies’ shares have gained 32.7% in the past six months compared with Occidental Petroleum’s 36.4% rise and the industry’s 23.3% rally.
Price Performance (Six Months)
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Rounding Up
Occidental Petroleum and TotalEnergies have oil and gas operations globally. However, TotalEnergies has a wider global operation compared with Occidental Petroleum. Both companies are expanding operations and meet the growing global demand for clean energy.
In the above discussion, we can see TotalEnergies’ ROE is better than Occidental Petroleum, yet the latter has better earnings per share growth estimates and utilizes relatively lower debt to run operations. OXY has a better dividend yield and shows a stronger share price performance.
Considering these facts, it is evident that Occidental Petroleum, the Zacks Rank #2 (Buy) stock, has an edge over TotalEnergies, which carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Occidental Petroleum Corporation (OXY): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).