With crude oil prices still refusing to break the $40/bbl mark, traders continue to debate the timing of the ultimate bottom for this cycle. Many longer-term investors, however, are focusing on which oilfield services company will emerge as the market leader once the recovery begins:Halliburton Company (HAL) or Schlumberger Limited. (SLB).
Both HAL and SLB Are Hurting
First of all, neither HAL or SLB looks like a compelling value play in the near-term. Capex in the oil space has screeched to a halt as the entire industry is now hunkered down and trying to weather the storm. While analysts are calling for a coming slew of bankruptcies among exploration & production companies and offshore drillers, HAL and SLB both seem relatively well-positioned from a financial standpoint.
Although neither company is profitable as of Q4 of 2015, they both still pay generous dividends to the tune of 2% and better. In addition, both Halliburton and Schlumberger feel good enough about their long-term financial outlook to have attempted extremely aggressive acquisitions during the downturn. HAL agreed to buy Baker Hughes Incorporated(BHI) for $34.6 billion back in November of 2014, while SLB agreed to acquire Cameron International Corporation (CAM) for $14.8 billion in August of 2015.
Reshaping HAL and SLB
Those two buyouts provide…
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