Enbridge vs. Occidental Petroleum: Does a Midstream or Upstream Energy Focus Make for a Better Stock Buy for 2027?

Investors must decide between Enbridge Inc. (ENB) and Occidental Petroleum Corp. (OXY) as they navigate the energy market. Enbridge specializes in midstream operations and utility services, while Occidental focuses on oil and gas exploration and production, with an increasing emphasis on carbon capture technologies. These companies offer distinct ways to invest in the energy sector, depending on one's risk tolerance.

Enbridge is a leading North American energy delivery company, operating an extensive pipeline network that transports crude oil and natural gas. The company serves approximately 7.1 million gas customers and manages significant utility networks in Canada and the United States. In fiscal year 2025, Enbridge's revenue surged to $46.6 billion, up from $38.2 billion in the prior year, and net income grew to $5.4 billion, compared to $3.9 billion in FY 2024.

The company's debt-to-equity ratio stands at 1.7x, while its current ratio is 0.5x, and it generated $2.2 billion in free cash flow for the year.

Occidental Petroleum, on the other hand, is an international energy company specializing in oil and natural gas exploration across the Permian Basin and the Middle East. The company provides essential energy products to global refiners and engages in midstream services through investments such as Western Midstream Partners (WES).

In FY 2025, Occidental's revenue reached $21.6 billion, a slight decline from $22.0 billion in 2024, and net income was $2.4 billion, down from $3.0 billion in the previous year. The company's debt-to-equity ratio is 0.7x, its current ratio is 0.9x, and it generated about $4.1 billion in free cash flow.

Enbridge faces risks related to its extensive physical infrastructure, including the potential for pipeline ruptures or leaks due to aging assets and severe weather events. The company also contends with regulatory scrutiny and the permitting process for large infrastructure projects. Occidental Petroleum is highly sensitive to fluctuations in global commodity prices, which could result in significant asset impairments if oil prices fall.

The company also deals with operational risks associated with offshore drilling, such as potential spills and seismic activity. Additionally, high levels of debt may limit Occidental's financial flexibility and increase its vulnerability to changes in its credit rating.

Valuation metrics for both companies can be found from Financial Modeling Prep (FMP) and may differ from those of other data providers. While Enbridge trades at a lower multiple of its trailing sales than Occidental, Occidental offers a more significant discount relative to its future earnings estimates. The Iran war has proven beneficial for Occidental Petroleum, as the company benefits more from the spike in world oil prices compared to the challenges caused by the conflict.

In 2026, Wall Street projects revenues to rise by about 25% to $27.8 billion for Occidental, with net income tripling to $7 billion, reflecting higher prices and lower costs for U.S. sourced oil due to the Iran war. Meanwhile, Enbridge's midstream business is less volatile than other energy industry segments, but it lacks direct exposure to oil price increases due to its fixed-rate contracts.

However, recent acquisitions, such as Tallgrass, position Enbridge for a promising 2026, with Wall Street projecting sales to rise by 25% to $81.5 billion, but with a net income slump of about $1 billion to $6.1 billion. Enbridge offers a stable dividend with a forward annual dividend rate of 5.8% at the current stock price. Ultimately, the decision of which energy giant to buy depends on whether investors prioritize stable dividends and infrastructure stability (Enbridge) or production growth and commodity price exposure (Occidental).