Schlumberger (NYSE:SLB) and Halliburton (NYSE:HAL) are both large-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.
Profitability
This table compares Schlumberger and Halliburton's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Schlumberger | -40.15% | 7.34% | 2.46% |
| Halliburton | -26.60% | 11.10% | 3.08% |
Analyst Recommendations
This is a summary of current ratings for Schlumberger and Halliburton, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Schlumberger | 3 | 8 | 15 | 0 | 2.46 |
| Halliburton | 2 | 17 | 5 | 2 | 2.27 |
Schlumberger presently has a consensus target price of $22.2870, suggesting a potential upside of 0.85%. Halliburton has a consensus target price of $13.25, suggesting a potential downside of 25.81%. Given Schlumberger's stronger consensus rating and higher possible upside, equities analysts clearly believe Schlumberger is more favorable than Halliburton.
Earnings and Valuation
This table compares Schlumberger and Halliburton's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Schlumberger | $32.92 billion | 0.93 | $-10,137,000,000.00 | $1.47 | 15.03 |
| Halliburton | $22.41 billion | 0.70 | $-1,131,000,000.00 | $1.24 | 14.40 |
Halliburton has lower revenue, but higher earnings than Schlumberger. Halliburton is trading at a lower price-to-earnings ratio than Schlumberger, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Schlumberger has a beta of 2.12, indicating that its share price is 112% more volatile than the S&P 500. Comparatively, Halliburton has a beta of 2.71, indicating that its share price is 171% more volatile than the S&P 500.
Institutional & Insider Ownership
72.5% of Schlumberger shares are held by institutional investors. Comparatively, 71.5% of Halliburton shares are held by institutional investors. 0.6% of Schlumberger shares are held by company insiders. Comparatively, 0.5% of Halliburton shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Dividends
Schlumberger pays an annual dividend of $0.50 per share and has a dividend yield of 2.3%. Halliburton pays an annual dividend of $0.18 per share and has a dividend yield of 1.0%. Schlumberger pays out 34.0% of its earnings in the form of a dividend. Halliburton pays out 14.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Schlumberger has increased its dividend for 1 consecutive years and Halliburton has increased its dividend for 1 consecutive years.
Summary
Schlumberger beats Halliburton on 10 of the 17 factors compared between the two stocks.
