Schlumberger Vs. Halliburton: Which Oil & Gas Stock Is A Better Buy?

To compete with the alternative energy industry, HAL announced its plan to set science-based targets to reduce emissions in 2021. The company expects to receive validation from the Science-Based Targets Initiative (SBTi) by 2022.

SLB’s captive insurance companies Castle Harbour Insurance Ltd. and Harrington Sound Insurance Ltd. received an “A” for Financial Strength and “A+” for Long term issuer credit ratings, from AM Best on November 12. This indicates strong risk-adjusted capitalization and excellent operating performance bySLB over the years, allowing its privately-held insurance companies to receive excellent credit ratings.

SLB sold its North American Rod Lift business to Lufkin Industries on November 2. This allows SLB to channel all its resources and focus on its energy-business segment while building a strategic relationship with well capitalizedLufkin Industries.

Recent Financial Results

HAL’s total operating income has risen significantly from the negative prior quarter values to $142 million in the third quarter ended September 30, 2020. Net income improved 98.9% sequentially, while EPS almost doubled from the prior quarter. The company reported a cash and cash equivalents balance of $2.12 billion for nine months ended September 30, up 34.6% year-over-year.

SAL’s non-GAAP pretax segment operating income has risen 45% sequentially to $575 million in the third quarter ended September 30, 2020. Non-GAAP adjusted EBITDA rose 21% from the prior quarter to $1.02 billion, while non-GAAP EPS (excluding taxes and credits) grew 220% sequentially to $0.16.

Past and Expected Financial Performance

HAL’s leveraged free cash flow has increased at a CAGR of 2.9% over the past three years, while SLB’s leveraged free cash flow rose at 2.6% over the same period.

However, SLB’s EPS rose at 6% year-over-year, while HAL’s EPS declined from the same period last year.

Analysts expect HAL’s EPS to rise 8.1% year-over-year to $0.67 next year. SLB’s EPS, in contrast, is expected to rise 32.8% from the year-ago value to $0.85 in fiscal 2021.

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