Occidental Petroleum (OXY -1.84%) has big aspirations. In fact, the defining features of the energy company today are centered around management's long-term goals. That is true on both the positive side and the negative. Oxy, as the company is more commonly known, could possibly set you up for life, but you should understand what you are getting into when you buy it.

One key event, two important outcomes

In 2019, integrated energy giant Chevron agreed to buy U.S. onshore driller Anadarko Petroleum. The deal made a lot of sense for Chevron, since it would materially expand the company's position in a key U.S. oil production region. Oxy had other ideas, stepping in and starting a bidding war with Chevron. In the end, Oxy won out, with a little assist from Warren Buffett and Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), which helped fund Oxy's superior offer.

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The deal played into Occidental Petroleum's long-term plan to grow its business. The end goal is to compete more directly with integrated giants like Chevron. That's not a bad goal. If Oxy succeeds, it will likely mean material long-term growth, which will clearly have financial benefits for investors. This is the reason you might want to buy Oxy today.

In fact, it has since made additional growth moves, most recently buying Crown Rock and Holocene. Crown Rock expands Oxy's oil and natural gas business, while Holocene operates in the carbon capture space, expanding the company's portfolio of energy-related businesses.

If Oxy can execute well on its growth plans -- and remember that Warren Buffett and Berkshire Hathaway remain large shareholders -- investors will probably end up with solid long-term returns.

There's a problem with Oxy

Building a larger and more diversified energy business is a great plan, but it requires strong execution. On that front, the Anadarko deal was a bit of a disaster. Oxy basically got out over its skis, taking more debt onto its balance sheet than it could handle. That became a problem in 2020 when the energy markets cratered thanks to the economic shutdowns used to slow the spread of the coronavirus. Oxy's stock plunged, and it cut its dividend.

Although the dividend is growing again, it remains well below its pre-cut levels. Oxy's stock price, meanwhile, remains well below where it was before the Anadarko transaction. Basically, that deal was a major turning point for the company. Given the tiny dividend yield of 2.2% or so today, Occidental Petroleum is really more of a growth story than an income story. For reference, the average energy stock yields around 3.5% right now.

OXY data by YCharts

There's nothing inherently wrong with a company focusing on growth. But if you are an income investor, well, Oxy probably won't be of much interest to you. And if you are a value investor, Oxy's price-to-earnings ratio of nearly 18 is above the industry average of roughly 16.

Oxy could set you up for life, but have the right expectations

So could Occidental Petroleum set you up for life? Sure, but it needs to execute well on its growth plans. And you need to go in knowing that growth is the main theme here. If you are looking for a cheap stock or a high yield, you'll likely be disappointed by Oxy. And if you do buy for the growth story, keep a close watch on the company's execution. Anadarko was a low point in many ways, and it suggests a risk that management could again bite off more than it can chew.