Beaten Down Drillers: The Value Case For Seadrill
Gareth Soloway | Oct 07, 2014 01:49AM ET
Seadrill Ltd (NYSE:SDRL) does oil and gas drilling exploration. The stock has fallen from a 52 week high of $47.28 to its current price of $24.50. The big question is, can Seadrill find support and bounce at this level? Is there value here?
First, Seadrill Ltd is a profitable company who is expected to make $3.05 in EPS in 2014 and $3.38 in 2015. The forward P/E for 2015 is 7.25. That puts it at a very reasonable valuation. Second and most importantly, the dividend yield is over 16% at current levels. What stock is paying that type of dividend? Now, it must be mentioned that there is an expectation for them to cut their dividend, but even a 40% cut, still puts it at a 10% yield. What profitable company is paying that type of dividend these days?
These factors make Seadrill Ltd very attractive at current levels. For more information and trade alerts on Seadrill Ltd, join the Research Center at InTheMoneyStocks.com. Take the seven day free trial and learn to swing trade stocks like the pros.
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