Based in Houston, Occidental Petroleum Corporation (OXY) is a leading oil and gas company with exploration and production activities concentrated in the United States, Latin America and the Middle East. 

Occidental focuses on long-lived assets where it can increase production by applying new technology and advance reservoir management practices. 

Of course, the entire oil patch has experienced tough times over the last few years, as the prices of both oil and gas have plunged. Even though oil has doubled from the lows of last February, it is still more than 60% below its peak a few years ago. 

Higher energy prices and increased production should push earnings as high as $2.40 a share over the next 12 months. That means the current yield of 4.4% is well supported -- and may be substantially increased. 

I’m not the only one who believes Occidental is undervalued, by the way. Director William Klesse recently purchased 10,000 shares at $72.15 a share, an investment of $722,000. Today, you can buy the stock cheaper than he did. And you should. 

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