Is Halliburton Still a Winner?

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With shares of Halliburton Company (NYSE:HAL) trading at around $44.89, is HAL an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Halliburton provides services and products for the exploration and development of oil and natural gas. What stands out most about Halliburton is that it has found a way to integrate drilling services while lowering costs. This is one of many reasons why analysts are heavily weighted to the Buy side for Halliburton. For example, of 34 analysts covering the stock, 27 have given it a Buy rating. The other seven analysts have given it a Hold rating. There are no analysts on the Sell side.

Halliburton operates in two segments: Completion & Production/Drilling & Evaluation. Halliburton is well known being an expert in hydraulic fracturing. This is a great reputation to have because it will lead to increased demand for Halliburton services.

For the current quarter, average analyst estimates are for EPS to come in at $0.58 on revenue of $6.89 billion. For 2013, average analyst estimates are for EPS to come in at $3.00 on revenue of $29.69 billion.

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Halliburton has strong fundamentals. It’s trading at only 14 times earnings, profit margin is solid, ROE is respectable, there is a 1.30 percent yield, cash flow is strong, and revenue growth has been high. Much of this can be seen on the chart below. This chart compares fundamentals for Halliburton, Schlumberger Limited (NYSE:SLB), and Baker Hughes Incorporated (NYSE:BHI). These three companies differ in size. Halliburton has a market cap of $36.95 billion, Schlumberger has a market cap of $98.10 billion, and Baker Hughes has a market cap of $19.83 billion.

HAL

SLB

BHI

Trailing   P/E

13.95

18.02

15.11

Profit   Margin

9.24%

13.03%

6.14%

ROE

17.84%

16.51%

7.93%

Dividend   Yield

1.30%

1.70%

1.30%

Operating   Cash Flow

$3.65 Billion

$6.69 Billion

$1.84 Billion

Short   Position

2.20%

1.00%

2.90%

Beta

1.82

1.81

1.82

 

Let’s take a look at some more important numbers prior to forming an opinion on this stock…

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