What kind of company is Occidental Petroleum (NYSE:OXY), exactly? Its name gives away the fact that Occidental is a leader among oil businesses. That’s important because the oil price could remain elevated for a while. On the other hand, OXY stock also represents a stake in the decarbonization movement, so it’s a surprisingly diversified energy sector investment.

Some folks choose to trade oil futures, but that’s often considered risky and complex. Shares of oil companies like Occidental Petroleum might be more appropriate for investors at different skill levels. You can just buy and hold them, collect the dividends and not worry about arcane concepts like “contango.”

Yet, you’ll still want to educate yourself as much as possible if you choose to invest in Occidental Petroleum. This shouldn’t be a problem, as there’s plenty of information available on the company. After getting the lowdown on Occidental, you’ll undoubtedly be more confident in a long-term investment.

OXY Stock Is a Terrific Value, and Offers Non-Oil Exposure

Speaking of confidence, you should be very comfortable owning OXY stock after discovering how reasonably valued it is. Occidental’s trailing 12-month price-to-earnings (P/E) ratio is currently quite low, at just 7.1.

Furthermore, the company recently declared a dividend. A common and highly effective strategy is to reinvest dividend payments into more shares of the company.

There’s also a diversification benefit to OXY stock. Bear in mind, Occidental Petroleum’s best-known income source is fossil fuels, but there’s more to the company than meets the eye.

Many investors have no idea that Occidental is working with other businesses to construct an air capture plant in Texas’s Permian Basin, develop a permanent carbon dioxide sequestration hub and even support large-scale Direct Air Capture projects.

Imagine potentially removing up to 30 million metric tons of carbon dioxide per year – Occidental Petroleum could help to achieve this goal.

Tight Oil Supplies Favor Occidental Petroleum

Meanwhile, Occidental Petroleum is still a highly profitable oil business. If the domestic and global oil supplies remain tight, this should benefit Occidental’s bottom line.

Not too long ago, the Organization of Petroleum Exporting Countries Plus (OPEC+) agreed to cut petroleum production by 2 million barrels per day. The White House has tried to keep oil prices down by tapping the Strategic Petroleum Reserve. However, that source of petroleum is now down to its lowest level since the 1980s.

In addition, the European Union is set to commence an embargo on Russian oil on Dec. 5. It seems like all of the oil-related news points to tight supplies lately. As long as the demand for oil doesn’t plummet and the supply stays tight, the oil price could remain elevated for quite a while – not great news for the consumers, but certainly a headwind for a fossil fuel producer like Occidental Petroleum.

What You Can Do Now

If you’re interested in a strong value and want to collect dividend payments, OXY stock is a great choice. Besides, it’s a business that offers exposure to oil and non-oil projects. So, there’s a diversification aspect here as well.

When all is said and done, there’s really no need to jump headfirst into complex investment instruments. The easiest path from Point A to Point B as a long-term investor is simply to hold shares of solid companies. And, hopefully, by now you’ll agree: It doesn’t get much more solid than Occidental Petroleum.

On the date of publication, Louis Navellier had a long position in OXY. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.