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Is it Worth Holding Schlumberger (SLB) in Your Portfolio?
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We issued an updated research report on oilfield services player, Schlumberger Limited (SLB - Free Report) on Mar 6, 2017. The company’s focus on international markets is encouraging. However, commodity price volatility remains an overhang on the stock.
As a result, the company carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
We appreciate Schlumberger’s strong focus on the international market instead of confining its operations to North America. This is because the continent has been witnessing intense competition after the shale revolution, while growth opportunities in the international market are growing. We believe that Schlumberger is poised to gain in the long run from its operations outside North America as technologies similar to those provided by the company are being adopted internationally.
Moreover, Schlumberger’s latest quarterly dividend is 50 cents per share. The current dividend yield of 2.5% has outpaced both 1.9% yield for the Zacks categorized Oil & Gas-Field Services industry and 1.3% yield for rival, Halliburton Company (HAL - Free Report) . Over the last one year, Schlumberger’s average yield of 2.5% also outperformed the dividend yield of 2.1% for the broader industry.
We also appreciate the Schlumberger-Cameron merger as it will support technology-driven growth, going forward.
However, commodity price-related issues remain a concern for the company. Despite the considerable recovery in crude prices from the last February lows, the commodity is still way below the level it was trading during mid-2014. Weakness in oil prices translates to lower incentives for drilling, in turn, lesser income for the likes of Schlumberger that support the drilling players in setting up oil wells.
Additionally, Schlumberger shares underperformed the broader industry in the last one year. During the aforesaid period, shares of the company gained 6% compared with almost 16% increase for the industry.
Ultra Petroleum is expected to report revenue growth of almost 56% in 2017.
W&T Offshore reported a positive earnings surprise in each of the last four quarters with an average beat of 50.53%.
Zacks' Top 10 Stocks for 2017
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Is it Worth Holding Schlumberger (SLB) in Your Portfolio?
We issued an updated research report on oilfield services player, Schlumberger Limited (SLB - Free Report) on Mar 6, 2017. The company’s focus on international markets is encouraging. However, commodity price volatility remains an overhang on the stock.
As a result, the company carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
We appreciate Schlumberger’s strong focus on the international market instead of confining its operations to North America. This is because the continent has been witnessing intense competition after the shale revolution, while growth opportunities in the international market are growing. We believe that Schlumberger is poised to gain in the long run from its operations outside North America as technologies similar to those provided by the company are being adopted internationally.
Moreover, Schlumberger’s latest quarterly dividend is 50 cents per share. The current dividend yield of 2.5% has outpaced both 1.9% yield for the Zacks categorized Oil & Gas-Field Services industry and 1.3% yield for rival, Halliburton Company (HAL - Free Report) . Over the last one year, Schlumberger’s average yield of 2.5% also outperformed the dividend yield of 2.1% for the broader industry.
We also appreciate the Schlumberger-Cameron merger as it will support technology-driven growth, going forward.
However, commodity price-related issues remain a concern for the company. Despite the considerable recovery in crude prices from the last February lows, the commodity is still way below the level it was trading during mid-2014. Weakness in oil prices translates to lower incentives for drilling, in turn, lesser income for the likes of Schlumberger that support the drilling players in setting up oil wells.
Additionally, Schlumberger shares underperformed the broader industry in the last one year. During the aforesaid period, shares of the company gained 6% compared with almost 16% increase for the industry.
Stocks to Consider
Some better-ranked players in the energy space include Ultra Petroleum Corp. and W&T Offshore Inc. (WTI - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ultra Petroleum is expected to report revenue growth of almost 56% in 2017.
W&T Offshore reported a positive earnings surprise in each of the last four quarters with an average beat of 50.53%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>