) are trading near their 52-week high of $43.96. In fact, the
Houston, TX-based oilfield services behemoth has seen its stock
price climb some 20% since the beginning of the year.
Despite this price appreciation, we remain optimistic on the
firm's near-term prospects, supported by consistency in its
earnings/cash flows, attractive fundamentals and a positive
outlook. These factors are reflected in Halliburton's Zacks Rank
#2 (Buy), implying that it is expected to outperform the broader
U.S. equity market over the next one to three months.
Why the Bullishness?
Halliburton is among the top three players in each of its
product/service categories, and is present in all major
hydrocarbon-producing regions of the world. The company enjoys
very strong relationships with both publicly-traded and national
oil companies worldwide.
Halliburton's international operations continue to reflect strong
demand for its services on the back of higher activity. This is
expected to be a key growth driver going forward with pricing in
the region remaining competitive.
Additionally, the world's second-largest oilfield services firm
) remains in excellent financial health with some $2.5 billion in
cash and a debt-to-capitalization ratio of around 23%. This helps
Halliburton to capitalize on investment opportunities and offers
options to make strategic acquisitions, thereby further improving
Finally, Halliburton's recent announcement of a 39% increase in
its quarterly dividend is another piece of positive news. We
believe that the dividend hike not only highlights Halliburton's
commitment to create value for shareholders but also underlines
the energy equipment supplier's healthy financial condition and
confidence in its business going forward.
Importantly, Halliburton has surpassed earnings estimates three
times in the last four quarters. The Zacks Consensus Estimates
for both 2013 and 2014 have also risen nicely over the last few
Other Stocks to Consider
In addition to Halliburton, there are certain other energy
equipment suppliers like
Exterran Holdings Inc.
Willbros Group Inc.
) that offer even greater value and are worth buying now. Both
these firms sport a Zacks Rank #1 (Strong Buy).
EXTERRAN HLDGS (EXH): Free Stock Analysis
HALLIBURTON CO (HAL): Free Stock Analysis
SCHLUMBERGER LT (SLB): Free Stock Analysis
WILLBROS GROUP (WG): Free Stock Analysis
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