This energy giant looks cheap after a pullback, but the market’s discount may be a deliberate verdict on a business facing serious questions.

Occidental Petroleum (OXY) explores for and produces oil and gas, a straightforward business that has recently put a complicated question to investors. Its stock trades at about $57.07 a share, and while it sits 13% below its recent high, it has also handily beaten the S&P 500 over the past year with a 31% return. Yet the market assigns it a price-to-earnings multiple of just 11.9, a steep discount to the S&P 500 median of 23.9. Is that a bargain, or is it a trap?

The paradox is that a business can look both solid and shaky at the same time. The numbers that suggest value are strong:…