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

Investors choosing between infrastructure stability and production growth face a difficult decision in today's energy market. Choosing between Enbridge Inc. (NYSE:ENB) and Occidental Petroleum Corp. (NYSE:OXY) requires weighing steady dividends against commodity price exposure.

Enbridge operates as a midstream giant and utility provider, focusing on the safe movement of energy across North America. Occidental Petroleum specializes in the exploration and production of oil and gas, with a growing focus on carbon capture technologies. These two companies offer different ways to gain exposure to the energy sector based on your risk tolerance.

The case for Enbridge

Enbridge is a leader in North American energy delivery, moving crude oil and natural gas through an extensive pipeline network. The company serves roughly 7.1 million gas customers and operates significant utility networks in both Canada and the United States. Its operations support critical infrastructure, including Gulf Coast export markets and partnerships with utilities like Duke Energy (NYSE:DUK).

In FY 2025, revenue reached $46.6 billion, representing a significant increase from the $38.2 billion reported in the previous year. Net income for the period was $5.4 billion, which improved from $3.9 billion in FY 2024. This growth shows the ability of the company to expand its earnings through its diversified energy delivery segments and growing asset base.

As of its December 2025 balance sheet, the debt-to-equity ratio was 1.7x. This metric measures total debt relative to shareholder equity, indicating how much the company relies on borrowed funds for its capital structure. The current ratio was 0.5x, measuring short-term liquidity, and the company generated free cash flow of $2.2 billion for the year.

The case for Occidental Petroleum

Occidental Petroleum operates as an international energy company with a focus on oil and natural gas exploration across the Permian Basin and the Middle East. It provides essential energy products to global refiners and utilizes midstream services through investments like Western Midstream Partners (NYSE:WES). The company is also expanding its presence among renewable energy stocks through its specialized carbon capture and storage initiatives.

In FY 2025, revenue reached $21.6 billion, a slight decrease from $22.0 billion in 2024. Net income for the fiscal year was $2.4 billion, down from $3.0 billion in the prior year. These results reflect the impact of changing market conditions on production earnings and a slight decline in overall revenue growth during the period.

Based on the December 2025 balance sheet, the debt-to-equity ratio was 0.7x. This figure helps investors see the balance between total debt and shareholder equity. The company maintained a current ratio of 0.9x, measuring its ability to cover short-term liabilities, and generated about $4.1 billion in free cash flow, providing significant liquidity for its operations.

Risk profile comparison

Enbridge faces risks related to its extensive physical infrastructure. High exposure to catastrophic incidents, such as pipeline ruptures or leaks, remains a primary concern because of its aging assets and severe weather events. Additionally, the company must navigate intense regulatory scrutiny and evolving permitting hurdles for its large infrastructure projects.

Occidental Petroleum is highly sensitive to fluctuations in global commodity prices, which can lead to significant asset impairments if oil prices drop. The company also deals with operational hazards inherent in offshore drilling, including potential spills and seismic activity. Furthermore, high levels of debt may limit its financial flexibility and increase its vulnerability to changes in its credit rating.

Valuation comparison

Occidental Petroleum trades at a significantly lower multiple of its future earnings estimates than Enbridge does, though Enbridge trades at a lower multiple relative to its trailing sales.

Metric	Enbridge	Occidental Petroleum
Forward P/E	23.6x	9.3x
P/S ratio	1.7x	2.5x

Valuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.

Which stock would I buy for 2027?

The Iran war has been good business for Occidental Petroleum. The American oil giant benefits far more greatly from the spike in world oil prices than the Gulf War harms it. That's because Oxy, as it is colloquially known, produces most (about 83%) of its oil in the United States, so it collects the higher price for oil that is set worldwide, with little of the higher costs or risks stemming from the Iran war.

Still, Wall Street sees Oxy as more problematic than other oil giants, because the business isn't growing its production volume as quickly as rivals, which means the business is more reliant on elevated energy prices to maintain its revenue and income levels. The business is also saddled with a good bit of debt, while Berkshire Hathaway (NYSE:BRKA)controls a lot of preferred equity, the support of which ties up some of Oxy's cash flow.

Wall Street sees revenues rising about 25% in 2026, to $27.8 billion--but that is slower than a lot of U.S. oil majors. Still, net income will more than triple to $7 billion, reflecting the higher prices and lack of higher costs for U.S. sourced oil due to the Iran war.

While midstream businesses are less volatile than other segments of the energy industry, there is a downside: Enbridge doesn't benefit directly from the spike in oil prices since the Trump administration launched its war on Iran in February. That's because, as a pipeline operator, nearly all of its capacity is sold in fixed-rate contracts. That is the downside to the "toll-road" model of a midstream energy business. That said, its expansion of capacity and recent acquisition of Tallgrass have the business set up for a fine 2026. Wall Street sees sales rising 25% to $81.5 billion this year, but with a slump in net income of about $1 billion to $6.1 billion. It is a stable dividend payer with a forward annual dividend rate of 5.8% at today's stock price.

So which energy giant is the stock to buy? Oxy looks cheap based on P/S and P/E ratios, but Enbridge's combination of less volatility in revenue and income and its juicy dividend yield makes it the choice for long-term investors.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Enbridge. The Motley Fool recommends Duke Energy. The Motley Fool has a disclosure policy.