Schlumberger's (NYSE:SLB) share price has plummeted 31% since reaching its 52-week high of $118 in June 2014 as North American oil producers have been reportedly cutting their capital budgets in light of the oil market turmoil. From a dividend investing perspective, the dip presents a great buying opportunity due to the stock's attractive dividend yield and valuation. In this article, I will walk you through my cash flow and dividend discount valuation analyses that are supportive of the view.
To gauge Schlumberger's capacity for near-term dividend growth, I constructed a cash flow model to predict its free cash flow generation in 2015 and 2016. My model relies on current consensus EBITDA estimates, which expect the metric to decrease to $11.3B in 2015 from $13.8B in 2014 and then recover to $12.5B by 2016 (see chart below). The dip in the 2015 EBITDA is primarily due to an average expectation of about a 25% drop in capital spending from oil producers in North America and about a 15% drop in other international markets.
Source: Seeking Alpha
Related Articles:
- 6 Big-Name Dividend Stocks Crushing The S&P 500
- 3 Higher-Quality, High-Yield Dividend Stocks
- 13 Dividend Growth Stocks With A Good Yield/Growth Mix
- High Yield, High Risk Dividend Stocks
- Dividend Stocks vs. Dividend ETFs
Dividend Growth Stocks News
- 3 TSX Dividend Stocks Yielding Up To 9.3% - Yahoo Finance - 5/28/2025
- 4 Must-Own Dividend Stocks For One Of The Greatest Megatrends In U.S. History - Seeking Alpha - 5/28/2025
- 3 Dividend Stocks Yielding Up To 3.8% - simplywall.st - 5/28/2025
- European Dividend Stocks To Watch In May 2025 - Yahoo Finance - 5/28/2025
- ASX Dividend Stocks To Consider In May 2025 - Yahoo Finance - 5/26/2025
- AFLAC Incorporated (AFL) Dividend Stock Analysis - 5/23/2025
- Automatic Data Processing Inc. (ADP) Dividend Stock Analysis - 5/16/2025
- Air Products and Chemicals Inc. (APD) Dividend Stock Analysis - 5/9/2025
- Waste Management, Inc. (WM) Dividend Stock Analysis - 5/2/2025
- Wal-Mart Stores, Inc. (WMT) Dividend Stock Analysis - 4/25/2025
Schlumberger: A Potential 15%-20% Upside From A Dividend Investing Perspective
Posted by D4L | Friday, February 13, 2015 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.