Last year was a tough one for the oil industry. Oil prices were all over the map: After starting the year at $60 a barrel, crude proceeded to rise to more than $85 before crashing back toward $50. That late sell-off in the oil market took most oil stocks down with it. Because of that, investors can buy shares of oil companies for much lower prices this year.

One that stands out from the pack is Occidental Petroleum (NYSE:OXY). Overall, the oil giant's shares lost 16.7% of their value last year and ended the year 29% below the peak from early summer. That lower share price is just one of the many reasons why Occidental Petroleum is my top oil stock for the coming year.

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Hitting an inflection point in 2018

Occidental Petroleum entered 2018 with one goal in mind: achieve its cash flow break-even plan. The target was to reduce costs and increase production so that the company could generate enough cash flow when oil is at $40 a barrel to pay its dividend and fund the new wells needed to maintain its production rate. The company achieved that goal by the second quarter, which was ahead of schedule.

In addition to that, Occidental also sold some of its noncore midstream assets for $2.6 billion. Those asset sales, along with higher-than-expected oil prices during much of 2018, enabled the company to haul in $5 billion of additional cash last year. The oil giant allocated $1.1 billion of that money to drill more wells, $2 billion toward share repurchases, and the rest to bolster its balance sheet. Because of that, the company enters 2019 in a strong position.

What to expect from Occidental Petroleum in 2019

While Occidental Petroleum's low oil price break-even plan enables it to maintain its operations at $40 oil, it also positions the company to grow at a solid rate at higher oil prices. At $50 a barrel, which is about where oil is to start 2019, the company can grow output at a 5% to 8% annual pace. However, after boosting spending by $1.1 billion toward the end of last year, Occidental is on track to increase its production by around 10% this year.

In addition to that fast-paced production growth, another catalyst for Occidental Petroleum in 2019 is its share repurchase program. The company already bought back $887 million of its stock during the third quarter of last year, and likely continued buying in the fourth quarter, which was a good time since shares were selling off along with the price of oil. Occidental Petroleum will likely buy back even more of its cheap shares in 2019 as it works to exhaust its $2 billion authorization. However, with $3 billion in cash at the end of the third quarter, it could boost its buyback plan this year, which is what many peers have done over the course of 2018.

Another way Occidental Petroleum will likely reward its investors during 2019 is through its dividend. With shares selling off at the end of last year, the oil giant's stock currently yields about 5%. Not only is that high-yielding payout on rock-solid ground, but Occidental Petroleum has a long history of increasing its dividend, with its current streak up to 16 straight years. That trend will likely continue in 2019, and includes the potential for Occidental to give investors a larger-than-normal increase this year, given how fast it's growing production, as well as the fact it achieved its low oil price break-even plan last year.

Lots up upside with less risk

Oil prices could remain quite volatile during 2019 given the slowing global economy, which could weigh on demand. However, that won't have any impact on Occidental's plans since it can operate just fine on $40 oil. Instead, the company is positioned to thrive this year since its activities last year have it on pace to grow production 10%. Add to that the company's high-yielding dividend and Occidental Petroleum could generate a total return in the mid-teens during 2019 if oil prices stagnate at around $50 a barrel while having significant upside if crude rebounds. That low-risk probability of earning a high return if oil languishes, with ample upside if it rallies, is why Occidental Petroleum tops my list of oil stocks to consider buying in 2019.

Check out the latest Occidental Petroleum earnings call transcript.