Oilfield services stocks probably offer some of the best stock investments in the oil sector. Oilfield services companies will be needed as long as the Peak Oil - energy crisis exists which I think will be indefinitely. Oilfield service stocks are a little less volatile than other oil sector stocks because many of the oilfield service companies, e.g., Halliburton, are competent and have thriving businesses (Iraq war contracts) outside the oil industry.
For convenience, oil tanker stocks and oil refinery stocks are included in the oilfield services category although a good argument can be made that they should be categorized separately.
Halliburton (HAL) - The world's largest oilfield service company with 104,000 employees. In addition to providing oilfield services, Halliburton also provides engineering and construction services. They do business in over 100 countries including, of course, Iraq, where Halliburton has received much criticism partly because of Vice-President Cheney's previous involvement with the firm.
Halliburton's market cap is $33 billion, revenues are about $15 billion per year, much smaller than oil/gas producing companies with a similar number of employees reflecting the labor intensive nature of Halliburton's service work. Net profit per year is about $2.5 billion. Halliburton stock has a PE of 10.
Halliburton is headquartered in Houston but with an additional headquarters in Dubai.
Schlumberger LTD (SLB) - A global oilfield services and information services company with most of its activities in the energy area. The company is headquartered in Houston.
Schlumberger has a market cap of $101 billion, revenues of $23 and net income of $5.2 billion.
Many analysts and financial advisors are high on the future of Schlumberger. The company has paid dividends, without interruption, for 50 years. Quite a record!
Schlumberger has a higher P/E than Halliburton (20 compared to 10) Both HAL & SLB are up about 20% over the past year.
Baker Hughes Incorporated (BHI). A leading-edge, very professional company in the oilfield services area. Headquartered in Houston as are most oilfield services companies. Baker Hughes is well-positioned to service the booming oil & gas industry. The company provides diversified services and products to the industry.
Market cap of Baker is $22 billion, revenues are about $10 billion per year and net income is $1.5 billion. P/E us 15. The stock is virtually unchanged from a year ago.
Transocean Inc (RIG) - Provides offshore drilling contract services for oil and gas wells throughout the world. RIGs drilling activity is focused on deep-water oil and gas. This is a hot area right now and likely to remain so over the next few years at least.
Transocean has a market cap of $44 billion, $6.4 billion revenue per year and $3.1 billion income.
Transocean Inc is growing rapidly. This drilling firm is highly rated and frequently recommended by the investment firms and its stock price reflects the attention it gets. A great company for the energy crisis.
The P/E of RIG is 10. This company is on virtually everyone's favorite list so it appears almost certain the company stock will continue to prosper.
Analysts give Furmanite the highest rating. It is a fast growing, small company with stock appreciation of two-thirds during the past year.
The market cap is $335 million, revenue is $264 million, and profit is $8 million. Present P/E is 40.
The company name was originally Kaneb then Xanser and presently Furmanite But, whatever the name, this is an impressive small stock!
Frontline LTD (FRO). A large shipping company, primarily engaged in the operation of oil tankers of two sizes, very large crude carriers (200,000 to 320,000 deadweight tons) and Suezmaxes (120,000 to 170,000 deadweight tons). The company works largely through subsidiaries. The company has been very profitable in the past few years and has distributed very large quarterly cash dividends in the recent past.
Market cap is $3.3 billion, revenues are $1.3 billion, and income is $569 million. The stock price is up about one-third over the past year. Present P/E is 6.
Here again, do your own due diligence. The oil shipping companies are a peculiar group where PE's drop as low as 3 when conditions are right. I want to grab anything that looks that cheap but, the old saying is that if something is too good to be true, probably it is not true. The presence of world crises and the effect of the crises on shipping rates and insurance rates greatly affect these stocks.
The tanker stocks may be good stocks for the market trader to play with (if he has a good feel for world economic and political conditions, and if he has nerves of steel.)
Tenaris S.A. (TS) This fine company is headquartered in tiny Luxembourg. It manufactures high-strength steel tubing (top producer of seamless tubing) used largely in the Oil & Gas Industry. As the price of oil and gas increase, and as the need for drilling to greater depths is a necessity, the demand grows for Tenaris high-strength tubing products. The company also made some impressive acquisitions in the past year when they acquired the operations of Hydril Corporation and Maverick Tube, two very highly-recognized companies in the industry.
The stock is listed in some places as a subsidiary of San Faustin N.V. Please use due diligence in this area.
The market cap of Tenaris is $27 billion, revenue is $10 billion, and net income = $1.9 billion.
The PE is 6. The stock has been volatile but little-changed over the past year.
Tenaris is an impressive company which is in the right business at the right time.
Valero Energy Corp. (VLO). If you want to invest in a company specializing in refining, this may be the oil company for you. The company operates 15 refineries in the US, Canada and the Caribbean.
Valero's market cap is $27billion, revenue is $95 billion and net income is $4.6 billion.
Valero's stock price is down about one-fourth. The company stock has been a real barn burner over the past 5 years or so.
The P/E is only 6 for Valero but this may be a stock that normally trades at low P/E ratios (I did not research its past history, extensively). Personally, I am a sucker for low-P/E stocks but many of the low P/E companies are not as good a buy as high P/E stocks. Use due diligence.
The oilfield services stocks such as the drilling stocks, tanker stocks & oil refinery stocks may provide some of the best stock values among the oil industry stocks.
Alternative Energy Company Stocks
Oil Crisis, Peak Oil, & Oil Shortage
Updated: 05/11/08
e-mail me @ vanc13@cox.net
Disclaimer
This web site, titled Oilfield Services Company Stocks, and the information included herein, is intended to provide information only, and should not be construed as investment advice. The information provided is meant to broaden your knowledge and enable you to make better investment decisions within your portfolio.
Sometimes I give an opinion on the quality of an investment. This information is based solely on my own investment goals and investment needs and might not reflect your goals and needs and might not be an appropriate investment for your portfolio.
Please consult with your financial manager/consultant/accountant before actually purchasing any of the investments discussed herein.
Other Web Pages This Web Site:
Looking for Oilfield Services Company Stocks? Try Google Search!