Tag Archives: National Oilwell Varco

National Oilwell Varco's Welcomed Pause

By David Smith, The Motley Fool

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One of my favorite expressions (admittedly homemade) is that almost nothing in life is ever linear. No matter how ineluctable a trend appears to be, it’s likely to be characterized by a two-steps-forward-one-back, or vice versa, tendency.

So it appears to be with National Oilwell Varco , of late the darling of the oilfield services sector. On Friday, however, it was the purveyor of news that its first-quarter 2013 results had fallen well below the consensus expectations of those who watch it most closely.

For the quarter, the company checked in with per-share earnings — excluding one-time baggage — of $1.29 per share. The analysts had pegged the number at about $1.36 or $1.37 a share, depending on whose assessment you’re monitoring. Perhaps even more importantly, the number was $0.15 below the comparable year-ago metric. At $5.31 billion, revenues also slid in under expectations, which had lined up at $5.42 billion.

A mixed quarter
These shortfalls did not occur in a quarter in which the services group has languished and generally disappointed at earnings time. Indeed, the figurative chieftain of the group, Schlumberger , reported precisely a week earlier that it not only had topped the forecasts of the Wall Street seers, but in fact had also outdone the prior year’s results. Baker Hughes didn’t accomplish the latter feat, but it topped the analysts’ prognostications and even managed to radiate an air of optimism about the North American onshore picture, recently the bane of the group’s existence.

Does this mean National Oilwell Varco is done for? Washed up? Hardly. We’re still talking about a company that sits amid a vital portion of the energy industry and that will continue to enjoy bright prospects unless mankind summarily discontinues the production and consumption of oil and natural gas. The company’s simply displaying the two-steps-forward-one-back thing.

The individual units
Turning to the company’s three operating units, rig technology recorded more than a 16% revenue increase, year over year. At the same time, its operating profit was up a minuscule 1.1% from the first quarter of 2012. As such, the operating profit for the segment slid to 21.2%, from the year-ago 24.4%.

Revenues for the petroleum services and supplies segment were virtually flat, while its operating profit dipped by just under 25%. That combination caused its operating margin to tumble to 18.8%, from 22.8% as recently as the last year’s initial quarter.

The smallest of the three units, distribution and transmission, turned in a more than doubling of its revenues — 118%, to be precise — thanks to bevy of completed acquisitions, while its contribution to operating income was up slightly by more than 50%. As a result, that metric was about 43% lower year over year.

The metric that really counts
Now, having regurgitated all of those numbers for you, I’ll venture that they’re all of far less importance — except as they imply long-term trends, which they

Source: FULL ARTICLE at DailyFinance

3 Ways to Get a Refund at the Gas Pump

By Tyler Crowe, The Motley Fool

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Oh, the things we do to save money on gas! Have you ever driven around the neighborhood looking for the cheapest station? Do you have one of those discount cards that gets you $0.05 off on the third Tuesday of the month?

Any way you shake it, no one likes to pay at the pump. Yet there’s one tried and true method to get money back from your gas purchases: Own the companies that bring you gasoline. Why let all of those dollars you spend on gasoline simply burn up in your engine when you could be getting some of that money back from the companies that found it, made it, transported it, or sold it to you?

Let’s look at three simple investment strategies that will take that money going into your tank and put it back into your pocket.

1. Sell the shovels so others can dig for oil
From the beginning, oil exploration has been a speculator’s game. While some drillers made it big, several others lost their shirts. Today, drilling has become much more advanced, and the chance of finding oil is much better, but there’s still no guarantee that oil will be found at every well.

What every well does have, though, is drilling equipment. And what better time to be in the oil-services industry than 2013? The exploration and production industry plans to spend a record $644 billion in capital expenditures to drill for new resources. And with some market projections showing that oil could go as high as $250 a barrel by the end of the decade, this trend will probably continue for quite some time.

Of all the companies in this space, one stands out among the rest as the one-stop-shop for everything drilling equipment and services: National Oilwell Varco . From simple replaceable parts such as drill bits to complex deepwater drilling ships, National Oilwell Varco is the world’s largest supplier of rig equipment, with a market share of about 60%.  

Those who got in early with NOV have been richly rewarded. The company’s share price is up more than 1,000% since its initial public offering in 1996, and 500% over the past 10 years. In addition, it issued its first quarterly dividend in 2010 and has raised it by 30% since. Granted, NOV‘s 0.8% dividend yield looks pretty small when compared with industry giant Schlumberger‘s 1.8% yield, but the new technologies for shale drilling give NOV plenty of room to grow both its income and its dividend.

2. If oil needs a ride, help take it there
A large part of the success of the recent U.S. energy renaissance has hinged on our energy infrastructure. When all of this new oil and gas started coming out of the ground, we didn’t have enough pipeline to support it. Slowly but surely, midstream energy companies have picked up the slack and laid thousands of miles of pipeline to keep oil and gas flowing smoothly across the United States. With so much …read more

Source: FULL ARTICLE at DailyFinance

This Is What the United States Should Be Exporting

By Tyler Crowe, The Motley Fool

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There has been a lot of back and forth about the possibility of exporting natural gas or crude oil from the U.S. Rather than focusing on the contentious items, let’s focus on something we can export: our expertise. The U.S. energy renaissance has created a vast amount of new technology and techniques that can be used to optimize drilling for unconventional resources, extend the life of mature plays, and solve infrastructure and bottleneck issues. 

In this video, Fool.com contributor Tyler Crowe looks at some of the companies who have led the way in developing these new techniques, and at a couple of countries that are either using these techniques today or are looking to do so in the future. With former oil exporters Brazil and Mexico in dire straits to increase production, these new ideas could help bring their national oil companies back to prominence.

National Oilwell Varco has also been at the forefront of bringing American drilling techniques and technology overseas. Its 60% market share and strong presence aborad makes it one of the biggest no-brainer investments in the energy space. To help determine if it could be a good fit for your portfolio, you’re invited to check out The Motley Fool’s premium research report featuring in-depth analysis on whether NOV is a buy today. For instant access to this valuable investor’s resource, simply click here now to claim your copy.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Tyler Crowe“, contentId: “cms.29733”, contentTickers: “NYSE:XOM, NYSE:DOW, NYSE:CLR, NYSE:EOG, NYSE:DNR”, contentTitle: “This Is What the United States Should Be Exporting”, …read more

Source: FULL ARTICLE at DailyFinance

3 Buy-Now Stocks From the "World's Greatest Retirement Portfolio"

By Brian Stoffel, The Motley Fool

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A full 23 months ago, I started identifying 10 companies that I would be putting $40,000 of my own retirement money behind. This was, has been, and will continue to be my way of helping the world to invest better.

Since then, that sum of money has grown to $50,960 — a 27.4% increase and $1,320 better than if I had just invested the money in the S&P 500.

Every month, I look over these stocks to see which three are tempting. I call these my “Buy Now” stocks because I think they’re pretty good deals. Read the chart below to see how the whole portfolio has performed, check out my best buys, and at the end I’ll offer up access to a special premium report on one of the 10 stocks that’s been floundering lately.

Company

Publication Date

Change

Vs. S&P 500

Google 

6/26/11

64.4%

38

Pricesmart 

6/28/11

56.7%

31

Baidu *

9/15/12

-20.8%

(44)

Intuitive Surgical

7/25/11

22.4%

1

National Oilwell Varco

7/28/11

-11.8%

(37)

Coca-Cola 

6/21/11

28.1%

3

Whole Foods

7/5/11

40.3%

19

Amazon 

7/12/11

26.1%

3

Apple 

6/30/11

33.8%

11

Johnson & Johnson 

8/1/11

34.7%

8

       

Source: Fool.com. All numbers accurate as of market close March 31, 2013. *Returns are for position in ATVI held from July 15, 2011, to Sept. 9, 2012, and transferred over to BIDU on Sept. 15, 2012.

Baidu
First on my list of best buys is a company that’s been a mainstay on here: Chinese search engine giant Baidu. To be honest, anyone following this portfolio is probably tired of hearing my reasoning for thinking Baidu is such a great stock at this price, so — at the risk of exposing myself to big-time confirmation bias — here’s a sampling of other Fool analysts who have been singling the stock out.

  • Just this week, Fool Daniel Sparks called Baidu out as one of two stocks to buy this month, saying: “Baidu’s substantial investments in research and infrastructure promise to create more opportunities.” 
  • Fool Dan Caplinger called Baidu his one stock to buy in April, reminding investors: “Baidu has expansion plans beyond China, and its prospects for picking up market share in other lucrative emerging Internet markets look bright.” 
  • And technology guru Andrew Tonner called Baidu the best value in all of technology, saying: “Every so often the stock market does investors a real favor and that’s the case with Baidu.”  

I don’t point these three out to say, “See? I’m right!” Rather, as I myself am running out of new reasons to say the stock‘s a buy, I’m offering some other opinions, all voiced within the past two weeks.

National Oilwell Varco
In a perfect world, we’d be able to use the energy the sun gives us to meet our wants — that’s the way it worked …read more
Source: FULL ARTICLE at DailyFinance

The "World's Greatest Retirement Portfolio" Continues to Outperform

By Brian Stoffel, The Motley Fool

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It’s been almost 23 months since I introduced the World’s Greatest Retirement Portfolio to Foolish readers. This was, has been, and will continue to be my way of helping the world to invest better. Putting my money where my mouth is, I pledged to put at least $4,000 behind each stock and attempt to hold each one for at least three years — though I’ve already broken that promise

Since I began, the market has returned 24.1%, which is pretty darn good by historical measures. Though this portfolio has been outperforming the market by double digits for well over a year now, it is currently ahead by just 3.3 percentage points.

Read below to see why the margin between the two is narrowing, and at the end, I’ll offer up access to a special premium report on one of these 10 companies.

Company

Publication Date

Change

Vs. S&P 500

Google 

6/26/11

64.4%

38

PriceSmart

6/28/11

56.7%

31

Baidu 

9/15/12

(20.8%)

(44)

Intuitive Surgical

7/25/11

22.4%

1

National Oilwell Varco 

7/28/11

(11.8%)

(37)

Coca-Cola

6/21/11

28.1%

3

Whole Foods 

7/5/11

40.3%

19

Amazon.com 

7/12/11

26.1%

3

Apple 

6/30/11

33.8%

11

Johnson & Johnson

8/1/11

34.7%

8

       

Source: Fool.com. All numbers accurate as of market close March 31, 2013. *Returns are for position in ATVI held from July 15, 2011, to Sept. 9, 2012, and transferred over to BIDU on Sept. 15, 2012.

One company that can’t catch a break
More or less, the companies in this portfolio didn’t perform terribly during the month of March, they just weren’t able to keep pace with the S&P 500, which climbed over 3% during the month. That wasn’t the case, however, for Intuitive Surgical , maker of the da Vinci surgical robot.

I’ve covered the stock’s dive already, but there are three simple events that caused the stock to drop. First, the Journal of the American Medical Association questioned the need for robotic hysterectomies. Second, the FDA announced it was investigating a rise in the company’s incidents reports. Finally, the president of the American Congress of Obstetricians and Gynecologists publicly echoed the concerns raised in the JAMA article.

Three companies having a good month
Even though the portfolio as a whole isn’t leading the market by quite as much, three stocks had a relatively good March.

Shares of Latin American club wholesaler PriceSmart  were up 5%. This came on the heels of the announcement that the company’s net sales increased 7.8% during the month of February, which included an impressive 8.9% increase in same-store sales. PriceSmart also announced it has acquired land in Tegucigalpa, Honduras, to open up its third store in the country. 

The total return from my investments in Coca-Cola and Johnson & Johnson also increased markedly during March. Part of this was due to the fact that Coke issued its quarterly dividend …read more
Source: FULL ARTICLE at DailyFinance

If You Want to Invest In Energy, Don't Follow Warren Buffett

By Tyler Crowe, The Motley Fool

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I may be committing investing heresy by saying this, but following Warren Buffett in the energy space is not the way to go.

Yes, Warren Buffett is head and shoulders above the rest in the investing community and has a few decent energy investments the Berkshire Hathaway portfolio. If you are looking for possible investments in the energy space, though, you should look at another investor: T. Boone Pickens. He’s been in the energy industry for more than 60 years, and his hedge fund, BP Capital, is dedicated almost exclusively to energy investments. Let’s take a deeper look into BP Capital’s portfolio and see if there are any themes that can help us with our own investment decisions

Don’t be afraid of natural gas
While getting into the natural gas market only last year might have seemed like a losing proposition, today several companies are selling at pretty deep discounts to their underlying assetsPickens and his team have a portfolio with more than 60% of of their exploration and production assets centered almost exclusively on natural gas. Both Southwestern Energy and Range Resources, two almost pure natural gas plays, make up more than 18% of BP Capital’s total holdings.

Anyone who has followed Pickens shouldn’t be surprised. Aside from his holdings with BP Capital, he also has a 20% personal stake in Clean Energy Fuels and has for several years been advocating for increased natural gas use through his Pickens Plan. It’s comforting to see that he and his partners at BP Capital are putting their money where their mouths are when it comes to natural gas.

Diversity is the spice of life
According to a recent energy report by Barclays, capital expenditures for exploration and production are set to reach a record $644 billion in 2013. With so much money pouring into the oil service industry, it would almost seem foolish to not be a part of it. Clearly, BP Capital sees a great opportunity in this sector, because it has bumped its holdings of National Oilwell Varco by 74% and picked up a considerable amount of shares in Weatherford International . Overall, BP Capital increased its total exposure to the oil services industry from 12% to 21%.

The big jump in oil services was part of a transition for BP Capital. Over the past quarter, it reduced its exposure to the E&P space from almost 75% to just under 60%. The bulk of that change was a transition toward services companies, but the group also picked up a pretty large share in Freeport McMoRan , the only company in the group’s holdings that isn’t considered a pure energy play.

No love for midstream
Probably the most glaring omission from BP Capital’s portfolio is midstream and pipeline companies. There are two possible reasons:

1 Stock to Buy for April

By Brian Stoffel, The Motley Fool

BIDU P/E Ratio TTM Chart

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Earlier this week, I introduced Fools to five different companies I was considering for my Roth IRA in April. I’ve been doing this for more than 20 months now, and my picks are currently outperforming the S&P 500 over the same time frame.

Read below to see what company I’m going to be adding, why I’m passing on the other four, and at the end, I’ll offer access to a special premium report on one of the companies discussed here.

Two companies that are just a little pricey
Now don’t get me wrong. I have nothing against paying what may seem like a high price for companies that I think are top-notch. I bought shares of LinkedIn twice within the past year, and each time the company’s P/E sat above 700!

So far, that’s paid off, as the shares are up substantially. But when there are other stocks that are just as attractive in terms of their innovation, position within their respective markets, and solid management teams, it seems to make a little more sense to move on to the next most reasonable variable: price.

That’s why I’m going to be passing on shares of both LinkedIn and Whole Foods this month. I have no doubt that there is a bright future for both of these companies — they make up almost 9% of my real-life holdings — but I just think there are better options from my five choices this month.

To be honest, this should be my choice…
If this were the very first month that I was starting this series — or contributing to my Roth IRA — there’s no doubt that Baidu , the parent of China‘s largest search engine, would be my first choice.

With an 80% market share in search, more than 500,000 small-business clients currently signed on (which just scratches the surface of the potential 40 million clients) in China, and growth rates that are impressive in both revenue and earnings, you’d think this stock was trading for sky-high prices.

But nothing could be further from the truth. Baidu currently trades for just 13 times expected earnings, and even though the stock itself has been cheaper in the past, its trailing P/E has never been so low –ever.

Source: BIDU P/E Ratio TTM data by YCharts.

But there’s a simple fact that I need to keep in mind: I’ve already bought shares of Baidu three times for this portfolio, and taken as a whole, the company makes up 8% of my overall holdings. Though I’d like to think Baidu is a shoo-in, nothing is guaranteed, and I wouldn’t feel comfortable putting so much money behind one company.

That leaves two energy companies
That leaves me with two quality companies: energy parts supplier National Oilwell Varco and engine maker Cummins . Though this is a particularly difficult decision, as both of these companies are first-rate, I’m going with Cummins this month.

In the end, the potential and …read more
Source: FULL ARTICLE at DailyFinance

1 Key Area to Invest in for Years of Success

By Taylor Muckerman and Joel South, The Motley Fool

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Big name oil companies are spending at record levels to continue building natural gas and oil reserves. A significant portion of this spending is targeted at the offshore markets. While drillers have been obvious beneficiaries, the subsea market could produce the top earners. 

What are we looking at in-house?
Two Motley Fool favorites stand a legitimate chance at doubling their business over the next five years. FMC Technologies has been signing contracts right and left in 2013, and Oceaneering International specializes in the niche business of remotely operated vehicles capable of withstanding the harsh environments far below sea level.

While competition is building, FMC Technologies should be able to maintain its market-leading position. It reports its results for the first quarter of 2013 on April 24th. If results are in line with, or beat, high expectations, the stock might not be this cheap for a long time. 

Want exposure to the equipment that rides the waves?
National Oilwell Varco is perhaps the safest investment in the energy sector due to its industry-dominating market share. This company is poised to profit in a big way; its customers are both increasing the number of new drilling rigs and updating aging fleets of offshore rigs. To help determine if it could be a good fit for your portfolio, you’re invited to check out The Motley Fool’s premium research report featuring in-depth analysis on whether NOV is a buy today. For instant access to this valuable investor’s resource, simply click here now to claim your copy.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Taylor Muckerman and Joel South“, contentId: “cms.27854”, contentTickers: “NYSE:PBR, NYSE:SLB, NYSE:BP, NYSE:FTI, NYSE:OII”, contentTitle: “1 Key …read more
Source: FULL ARTICLE at DailyFinance

Hedge Funds Like This Energy Company

By Taylor Muckerman and Joel South, The Motley Fool

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Investors that might be interested in the purchasing habits of the so-called professionals can glean some insight by examining 13-F filings. Now, while 13-Fs typically are released a bit later than the activities they record, they can offer a nice starting point for research.

During the fourth quarter of 2012, it appears that energy companies were not the belles of the ball. Anadarko Petroleum was really the only widely purchased energy company, almost comparable to the popular companies in the technology and banking sectors. In the following video, Motley Fool analyst Taylor Muckerman breaks down why he thinks this company was the chosen one from the energy space.

But which one has Warren Buffett been purchasing lately?
National Oilwell Varco is perhaps the safest investment in the energy sector due to its industry-dominating market share. This company is poised to profit in a big way; its customers are both increasing the number of new drilling rigs and updating aging fleets of offshore rigs. To help determine if it could be a good fit for your portfolio, you’re invited to check out The Motley Fool‘s premium research report featuring in-depth analysis on whether NOV is a buy today. For instant access to this valuable investor’s resource, simply click here now to claim your copy.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Taylor Muckerman and Joel South“, contentId: “cms.27447”, contentTickers: “NYSE:APA, NYSE:XOM, NYSE:CVX, NYSE:MRO, NYSE:APC”, contentTitle: “Hedge Funds Like This Energy Company”, hasVideo: “True”, …read more
Source: FULL ARTICLE at DailyFinance

Second Gulf of Mexico Find Validates Conoco's Big Bet

By Matthew DiLallo, The Motley Fool

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For the second time in as many weeks ConocoPhillips  has announced another big oil discovery in the Gulf of Mexico. This time the company’s Coronado prospect, which it owns with Chevron and Anadarko , has hit pay dirt. While the discovery isn’t as large as the one it announced last week, it’s another validation of the company’s big bet in the Gulf. 

Drilling down into Coronado
The Coronado prospect, which is operated by Chevron, was drilled in 6,127 feet of water and to a depth of 31,866 feet. The partners encountered more than 400 feet of net pay, which is the thickness of the reservoir that is capable of producing commercially viable oil and gas. While the results are still being evaluated, and additional appraisal will be needed, this is great news for Conoco and its partners.

Coronado is located just 12 miles from last week’s Shenandoah discovery. That prospect has seen two appraisal wells drilled, with net pay coming in at 300 feet and most recently 1000 feet. Taken together, Conoco’s position in this part of the Gulf — called the Lower Tertiary Trend — is very promising.

Conoco in the Gulf
These recent discoveries are likely just the tip of the iceberg for Conoco. The company is among the largest leaseholders in the deepwater of the Gulf of Mexico with about 2 million net acres. Conoco and its partners plan to drill five wells this year with an additional three wells possible.

Looking ahead, Conoco investors should keep an eye out for announcements on its next two prospects. Drilling at the company’s Adrennes prospect was started earlier this quarter and its Thorn well is scheduled to begin in the second quarter. Thorn is the only of the five planned wells that is operated by Conoco so its results will be important to watch. The company has a 65% working interest in Thorn which as you can see from the map below is about double the interest it has in both Shenandoah and Coronado.

Source: Conoco Phillips Investor Presentation

My Foolish take
ConocoPhillips has ambitious plans to grow its production by 3%-5% annually through 2017. However, the Gulf of Mexico represents the company’s next phase of production growth beyond that time frame. This second discovery really helps to further validate the company’s big push into the Gulf. After years of repositioning the company, Conoco is beginning to prove that those were the right moves — sooner or later investors will take notice.

Despite ConcoPhillips’ recent successes, exploring for oil in the Gulf of Mexico is not without its risks. If you’re looking for a safer way to invest in energy, National Oilwell Varco is perhaps the safest investment in the energy sector due to its industry-dominating market share. This company is poised to profit in a big way; its customers are both increasing the number of new drilling rigs and updating aging fleets of offshore …read more
Source: FULL ARTICLE at DailyFinance

Why National Oilwell Is Ready to Rebound

By Brian D. Pacampara, The Motley Fool

Filed under:

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool’s free investing community, oilfield services specialist National Oilwell Varco has earned a coveted five-star ranking.

With that in mind, let’s take a closer look at National Oilwell and see what CAPS investors are saying about the stock right now.

National Oilwell facts

Headquarters (founded)

Houston (1862)

Market Cap

$29.1 billion

Industry

Oil and gas equipment and services

Trailing-12-Month Revenue

$20.0 billion

Management

Chairman/CEO Merrill Miller Jr.

President/COO Clay Williams

Return on Equity (average, past 3 years)

11.9%

Cash/Debt

$3.3 billion / $3.2 billion

Dividend Yield

0.8%

Competitors

Halliburton

Schlumberger

Weatherford International

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 99% of the 3,951 members who have rated National Oilwell believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, Becker2011, touched on a couple of the trends working in National Oilwell‘s favor:

First, [National Oilwell] is absolutely the best and, in many cases, only source of equipment for E&P companies looking to utilize more complex drilling techniques. Eventually, this will be all companies. Secondly, the company’s products dominate both onshore and offshore drilling markets, and will continue to do so in the future.

National Oilwell Varco is perhaps the safest investment in the energy sector due to its industry-dominating market share. This company is poised to profit in a big way; its customers are both increasing the number of new drilling rigs and updating aging fleets of offshore rigs. To help determine if it could be a good fit for your portfolio, you’re invited to check out The Motley Fool’s premium research report featuring in-depth analysis on whether NOV is a buy today. For instant access to this valuable investor’s resource, simply click here now to claim your copy.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Brian D. Pacampara”, …read more
Source: FULL ARTICLE at DailyFinance

1 Incredibly Boring yet Incredibly Important Number to Watch

By Aimee Duffy and Tyler Crowe, The Motley Fool

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Every year, the oil-field services company Schlumberger polls executives in the oil and gas industry and publishes a human resources benchmark survey. The company has said point-blank that given the high demand for skilled employees in the industry and the complicated extraction techniques, human resources is the main driver of production growth right now.

Today, Fool.com contributors Aimee Duffy and Tyler Crowe talk about keeping track of the efforts that the companies you invest in are making to retain top talent, including boosting salaries and creating employee-focused cultures.

National Oilwell Varco is perhaps the safest investment in the energy sector due to its industry-dominating market share. This company is poised to profit in a big way; its customers are both increasing the number of new drilling rigs and updating aging fleets of offshore rigs. To help determine if it could be a good fit for your portfolio, you’re invited to check out The Motley Fool’s premium research report featuring in-depth analysis on whether NOV is a buy today. For instant access to this valuable investor’s resource, simply click here now to claim your copy.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Aimee Duffy and Tyler Crowe“, contentId: “cms.25765”, contentTickers: “NYSE:XOM, NYSE:CVX, NYSE:SLB, NYSE:ENB”, contentTitle: “1 Incredibly Boring yet Incredibly Important Number to Watch”, hasVideo: “True”, pitchId: “60”, …read more
Source: FULL ARTICLE at DailyFinance

5 Stocks That Are Too Stingy With Their Dividends

By Dan Caplinger, The Motley Fool

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Investors want dividend income, and most companies have been more than willing to deliver higher dividends to their shareholders. With nearly 2,900 companies having raised their dividends during 2012, most investors got to share in the strong corporate-earnings results that helped push the stock market so strongly last year.

Yet even as dividends have increased, companies haven’t necessarily been as forthcoming about giving you as much in quarterly payouts as you might deserve. With the average payout ratio of dividends to earnings at just 36%, far below its usual level of closer to 50%, there’s plenty of room for companies to be freer about sharing their wealth. Today, let’s take a look at five companies that are particularly closed-fisted about making dividend payments.

National Oilwell Varco , 8.4% payout ratio
As a major player in the energy-services industry, National Oilwell Varco has done an excellent job of cashing in on the boom in oil and gas. By providing complex equipment like drilling rigs as well as simple supplies like drill pipe and bits and related services, the company has made itself an integral part of the production process for oil and gas producers across the industry.

Yet given how fast the company’s profits have grown, National Oilwell Varco‘s dividends haven’t keep up. Consider: Since 2010, Varco has seen its earnings jump 45%, with the company earning $5.86 per share over the past 12 months. Yet the company has only raised its annual dividend by a puny $0.08. Even if growth slows down or even stops in the near future, Varco still has plenty of capacity to pay more than its 0.7% yield.

Southwest Airlines , 5.2% payout ratio
No airline has been more consistently profitable over the years than Southwest. Even though its decision not to charge baggage fees has left Southwest as the odd player out in the industry, with its rivals adding billions to their bottom lines through fees, Southwest has nevertheless used its customer service advantage to keep itself in the black.

Where Southwest hasn’t soared is in paying dividends. Even though the company finally doubled its long-standing payout rate to a full $0.01 per share quarterly, that still equates to just a 0.3% yield. Admittedly, the airline industry is one where it’s important to have plenty of capital on hand, but Southwest’s strong track record suggests that it should be able to afford handing back more than just peanuts to shareholders.

CF Industries , 5.6% payout ratio
CF Industries has found itself in the right place at the right time, with its lucrative fertilizer business having soared in the wake of rising food prices and high demand from farmers seeking to improve yields. With holdings in both nitrogen-based and phosphate fertilizers, CF hasn’t suffered from a lack of income.

In that light, CF‘s dividend yield of just 0.8% doesn’t make much sense. By contrast, MLP subsidiary Terra Nitrogen pays a 6.6% yield, much …read more
Source: FULL ARTICLE at DailyFinance

With Chavez Gone, Will Oil Companies Warm to Venezuela Again?

By Tyler Crowe and Aimee Duffy, The Motley Fool

Filed under:

With the passing of Hugo Chavez, some of the superpowers of oil are looking to court the Venezuelan government for a larger footprint in some of the nation’s oil plays. Chevron has jumped out in the lead by starting talks already, and several others are lining up as well. In the following video, Fool contributor Tyler Crowe speaks with Aimee Duffy to explain why the Venezuelan government may be more open to the idea of larger investments from outside sources and who might want a piece of the Venezuelan pie.  

If you’re looking for a little more international energy exposure in your portfolio, look no further than National Oilwell Varco. It is perhaps the safest investment in the energy sector because of its industry-leading 60% market share, and almost 91% of its capital expenditures in 2013 are geared for the international market. To help determine whether it’s a nice fit for your portfolio, check out our premium research report with in-depth analysis on whether NOV is a buy today. For instant access to this valuable investor’s resource, simply click here now and claim your copy today.

The article With Chavez Gone, Will Oil Companies Warm to Venezuela Again? originally appeared on Fool.com.

Fool contributors Aimee Duffy and Tyler Crowe have no position in any stocks mentioned. You can follow them both on Fool.com under the handles TMFAimeeD and TMFDirtyBird.
The Motley Fool recommends Chevron and Statoil. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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ExxonMobil Makes World Map Look Like a Game of "Risk"

By Taylor Muckerman and Joel South, The Motley Fool

Filed under:

Big oil companies have been moving their crews around the globe much like game pieces in the board game “Risk”. And risk is certainly the name of the game in the oil space as well. Companies like ExxonMobil  and Chevron  are pushing the boundaries of what has been tested in the past. Crews are moving to harsher environments and rougher waters in search of reserve replacements. 

Arctic and offshore drilling, once pipe dreams in the energy world, are quickly becoming the norm. Royal Dutch Shell  has identified 14 offshore areas in which it has plans for exploration. Because of this, existing rigs will need to be updated with newer capabilities and outfitted for increased safety. That’s why a company like National Oilwell Varco  could be in for a big payday since it is in the business of retrofitting rigs both onshore and offshore. Warren Buffett clearly believes in this company. Maybe you should too.

National Oilwell Varco is perhaps the safest investment in the energy sector due to its industry-dominating market share. This company is poised to profit in a big way; its customers are both increasing the number of new drilling rigs and updating aging fleets of offshore rigs. To help determine if it could be a good fit for your portfolio, you’re invited to check out The Motley Fool’s premium research report featuring in-depth analysis on whether NOV is a buy today. For instant access to this valuable investor’s resource, simply click here now to claim your copy.

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Source: FULL ARTICLE at DailyFinance

Is National Oilwell Varco One of the Best Companies in America?

By Dan Caplinger, The Motley Fool

Filed under:

The Motley Fool recently released its list of The 25 Best Companies in America, naming the best businesses the nation has to offer. Yet even among companies that didn’t make the final cut, some stocks distinguished themselves with their high quality and promise. National Oilwell Varco is one of those companies, and it definitely deserves at least an honorable mention for its achievements.

The case for National Oilwell Varco
National Oilwell Varco is a huge player in the energy industry. But you won’t see its name plastered on the side of gas stations or listed among companies making big oil and gas discoveries, because Varco is neither an exploration and production company nor a downstream marketer of energy products. Rather, Varco is the company that oil and gas producers go to in order to get the equipment they need, including derricks, blowout preventers, mud pumps, and other drilling components, as well as the control systems and instrumentation necessary to monitor and guide drilling operations.

Unlike most areas of the energy industry, in which a large number of competitors vie for dominance, Varco has already captured market share of 60%, thanks to acquisitions of rival firms. Its recent offer to buy Robbins & Myers for $2.5 billion, for instance, will add pump technology and flow control capacity to Varco’s arsenal. Moreover, because its equipment is useful for drilling of all kinds, the vacillations between oil, natural gas liquids, and dry gas drilling that producers have made in recent years don’t have an impact on Varco. As long as drilling is occurring, Varco can profit from it.

How National Oilwell Varco treats its stakeholders
It’s important to look at National Oilwell Varco from the perspective of all of its stakeholders, including not just investors but also workers, customers, and the broader community. For its more than 40,000 employees, Varco has turned its massive growth into job opportunities around the world, offering careers in North America, Europe, and Asia. Moreover, its Next Generation program of training college graduates about the ins and outs of the oil and gas industry ensures a steady flow of well-qualified candidates who can serve the company throughout their careers.

Where Varco truly shines, though, is in how it serves its customers. By acting as a one-stop shop for exploration and production companies of all sizes, Varco has done an excellent job of getting its customers in the habit of looking to the company anytime they need something related to their oil and gas operations. The company counts Petroleo Brasileiro as a big customer, and with Petrobras having made huge discoveries off the Brazilian coast in recent years, that relationship will likely gain in significance in the years ahead.

For investors, National Oilwell Varco‘s stock has been mired in some of the same trends that have held many exploration and production companies back. As prices have plunged, many producers have had to …read more
Source: FULL ARTICLE at DailyFinance

The Only Perfectly Rated Oil-Field Services Stock

By David Lee Smith, The Motley Fool

Filed under:

There are innumerable ways to ascertain a company’s strength and attractiveness as a potential investment. For starters, there are metrics of virtually all shapes and sizes, along with judgments about management’s apparent capabilities and vision, an understanding of the corporation’s history, and finally — but hardly least — a familiarity with the current micro and macro trends in the industry in which it operates.

But think about it: The one item that, at least in theory, bakes in all of the above — and then some — is its overall analyst recommendation, which you can easily find on Yahoo! Finance. That number is simply a weighted average of the ratings of all the analysts who follow a given company. It’s arrived at by ascribing a “1” to a strong buy, a “2” to a buy, a “3” to a hold, and so on. On that basis, the lower the weighted average, the better. A weighting at or below “2” serves as something of an inflection point, where the most compelling companies reside.

Where the stars hang out
For instance, in the oil-field services sector, National Oilwell Varco , the popular and rapidly expanding maker of equipment for drilling rigs, sits right at 2.0. Schlumberger , the biggest — and many think the best — member of the sector sports a 1.7. But Houston-based Flotek Industries , a small-cap ($686 million) provider of services to oil and gas operators sits atop the heap with a can’t-be-improved-upon 1.0.

Admittedly, that number emanates from the work of just four analysts, 30 fewer than those who ante up ratings on Schlumberger. But, as an erstwhile analyst, I find the conclusions of four professionals — who have figuratively consumed hours, or even weeks, under the hood of Flotek, spent time with management, and are conversant with the services group widely defined — to constitute a good starting point in assessing the company’s value.

What’s Flotek actually do?
Flotek operates in three key areas in assisting producers of various sizes, other services companies, and drilling contractors in their daily tasks:

  • Its chemicals and logistics division develops and manufactures specialty chemicals that find application in the stimulation, cementing, and blending of oil and gas wells. 
  • The drilling products division designs, manufactures, and repairs downhole drilling tools. In addition to oil and gas producers, the unit serves the mining and water industries.
  • Flotek’s artificial lift division provides pumping system components that include electrical submersible pumps, gas separators, and production valves.

As one who spends substantial time considering the large capitalization likes of the abovementioned Schlumberger and Varco — and given my conviction that, in an economy that’s probably more precarious than many investors realize — I’m convinced that being overweighted in energy is appropriate in today’s world. Beyond that, a smaller-capitalization, albeit high-quality, company like Flotek can add a desirable element of balance to a Foolish energy portfolio.

A pair of small-cap rivals
Of course, there are other smaller companies …read more
Source: FULL ARTICLE at DailyFinance

What Industry Is Making Dividend Headlines?

By Taylor Muckerman, The Motley Fool

Filed under:

Transocean , the offshore driller, made a splash during its earnings release by reinstating its dividend program at $2.24 per share on an annual basis. Considering that activist investor Carl Icahn made it known that he felt the company should release cash to investors, this should come as no surprise. While it wasn’t the amount Icahn was looking for, it is no doubt a welcome sight for investors in the company. Transocean’s dividend reinstatement follows the dividend news of several other energy service companies this quarter, and there could be a few more stories on the way. To see which company Motley Fool analyst Taylor Muckerman has his eyes on, check out the video below.

Whose dividend hike could be on deck?
National Oilwell Varco is perhaps the safest investment in the energy sector due to its industry-leading 60% market share. This company is poised to profit in a big way; its customers are both increasing the number of new drilling rigs as well as updating an aging fleet of offshore rigs. To help determine if NOV is a nice fit for your portfolio, check out our premium research report with in-depth analysis on whether NOV is a buy today. For instant access to this valuable investor’s resource, simply click here now and claim your copy today.

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Source: FULL ARTICLE at DailyFinance