Want $1,000 in dividend income? Here’s how much you should invest in Occidental stock.

Occidental Petroleum (OXY 0.54%) stocks have gained immense popularity among energy investors in about a few years, and much of the credit goes to Warren Buffett. The legendary investor has been a consistent buyer of oil and gas stocks and now holds a significant stake in it through his company, Berkshire Hathaway. As of June 30, Berkshire held a 28.8% stake in Occidental Petroleum.

With dividends reinvested, Occidental Petroleum shares have nearly doubled investors’ money in the past three years alone. However, the stock has fallen considerably in recent months, providing energy investors with an excellent buying opportunity. You could even earn $1,000 in annual dividend income if you invest in oil and gas stocks now. Here’s how.

Occidental Petroleum increased its dividend by 22% in early 2024 and last paid a quarterly dividend of $0.22 per share. This translates to an annual dividend of $0.88 per share. At the current share price of about $52.45 each, you can earn an annual dividend income of just over $1,000 if you buy 1,140 shares or invest about $59,800 in Occidental Petroleum stock now.

It may seem like a big investment, but Occidental Petroleum stock should have a strong upside here given its growth plans.

Buy and own Occidental Petroleum stocks

Occidental Petroleum acquired CrownRock in August for about $12 billion. The deal expanded Occidental’s footprint in the Midland Basin and is expected to immediately build its cash flows. In addition, Occidental Petroleum expects to raise $4.5 billion to $6 billion by selling some of the acquired assets and use the proceeds to reduce debt.

This should significantly strengthen Occidental Petroleum’s balance sheet, giving it more room to invest in oil and gas, chemicals and low-carbon businesses while growing its dividend over time. Considering the stock is down over 12% this year, it’s a great buy.