EQT vs. Occidental Petroleum: Which Energy Stock Is a Better Buy in 2026?

Energy markets are shifting as global demand for natural gas grows alongside new carbon capture initiatives. Choosing between EQT Corp (NYSE:EQT) and Occidental Petroleum Corp (NYSE:OXY) requires weighing regional dominance against global diversification.

EQT operates as a pure-play natural gas leader, while Occidental maintains a broader reach across oil and world markets. Both companies are navigating a volatile commodity landscape but offer distinct paths for investors looking to capture value in the evolving energy landscape of 2026.

The case for EQT Corp.

EQT is a vertically integrated natural gas company that focuses its upstream and transmission work within the Appalachian Basin. The company manages its own contract and hedging strategies through EQT Energy, LLC, and relies on several third-party midstream partners for processing. It sells natural gas to a variety of utilities and industrial buyers across North America as the global landscape shifts toward renewable energy stocks and cleaner alternatives.

In FY 2025, the company’s revenue reached nearly $8.6 billion, representing an impressive 61.5% growth rate over the prior year. This jump in top-line results helped produce a net income of more than $2.0 billion. The company reported a net margin of nearly 22.5%, which measures the portion of each dollar earned that remains as profit after all expenses are paid.

As of its December 2025 balance sheet, the debt-to-equity ratio was approximately 0.3x. This ratio measures total debt relative to shareholders’ equity, with a lower number indicating the company relies less on borrowed funds to finance its operations. During the same period, the business generated nearly $2.8 billion in free cash flow, which is the cash remaining after the company pays for its capital expenditures.

The case for Occidental Petroleum

Occidental Petroleum is an international energy giant that produces oil and natural gas while expanding into carbon management technologies. The company utilizes Western Midstream for gathering services in the U.S. and works with international partners like Al Hosn Gas to manage processing in the Middle East. Following the divestiture of its chemical segment to Berkshire Hathaway Corp (NYSE:BRKB), which closed in early 2026, the company maintains a customer base of global refiners and industrial end users.

For FY 2025, revenue reached approximately $21.6 billion, down almost 2% from the previous fiscal year. Despite the decline in revenue, the company achieved a net income of nearly $1.68 billion. This resulted in a net margin of close to 8% for the year, showing the percentage of revenue remaining after accounting for all costs and taxes.

According to the December 2025 balance sheet, the company's debt-to-equity ratio was roughly 0.7x. This indicates that for every dollar of equity, the company carries about 70 cents in total debt. The company also generated around to $3 billion in free cash flow, defined as cash flow from operations minus capital expenditures.

Risk profile comparison

EQT faces significant risks from commodity price volatility, as its financial health is directly tied to the market prices of natural gas. The company also faces regulatory hurdles and public opposition to its midstream projects, such as the MVP Mainline, which can lead to costly delays. Furthermore, increasing pressure from environmental regulations regarding methane emissions could force EQT to spend more on compliance, potentially impacting its bottom line.

Occidental Petroleum is exposed to global oil price fluctuations, which are often influenced by geopolitical stability and OPEC decisions. The company's heavy investment in carbon storage technology carries execution risk, as these projects depend on new technology reaching commercial viability. Additionally, Occidental must manage operational hazards like well blowouts and potential regulatory limits on water disposal, while competing against giants like ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX).

Valuation comparison

Occidental Petroleum appears to be the more affordable option based on its forward price-to-earings ratio, which compares the stock price to future earnings estimates, and its price-to-sales ratio, which measures the stock price against revenue.

Sector benchmark uses the SPDR XLE sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

Oil and gas producers are closely tied to fluctuations in the global price of the commodity, so both EQT and Occidental Petroleum face the benefits and risks of being so closely tied to natural gas and crude oil prices.

Occidental has done an admirable job of paying down debt in recent years, wiping $15.6 billion from its books since 2024. While the company’s revenues have benefited greatly from the spike in oil prices due to the Iran war, Oxy management has lowered its expectations for production in 2026, and the ongoing uncertainty in the Persian Gulf promises to continue to roil crude prices for better or worse.

EQT, as a pure-play natural gas producer operating in the U.S., has a lot less macroeconomic risk in the months ahead. Spot natural gas prices are currently around their long-term average, so there’s no price-spike benefit for EQT as there is for Occidental, but the long-term shift of the European Union away from Russia for its natural gas supply and toward the U.S. is a tailwind for the business. EQT sells some of its production at fixed contract prices, but can still benefit from higher export prices for a significant portion of its production. Like Oxy, EQT has done a great job paying down debt, making it cheaper in the long run for it to finance improvements that lower its cost of production.

EQT trades at a higher P/E and P/S than Occidental Petroleum, but for stability and long-term growth, the premium for EQT appears to be worth it.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Chevron, and EQT. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.