According to the All-in-One Screener, a major GuruFocus Premium feature, three energy companies with good business predictability, high dividend yields and a Shiller price-earnings ratio below 16 are Helmerich & Payne Inc. (HP, Financial), Schlumberger Ltd. (SLB, Financial) and Exxon Mobil Corp. (XOM, Financial).
Energy sector has lowest Shiller price-earnings ratio among sectors
In mid-September, crude oil prices spiked 15% following an attack on Saudi Arabian oil plants. While CNBC columnist Lizzy Gurdus mentioned that Saudi Aramco is reinstating production “faster than expected,” sending oil prices down, the energy sector has underperformed the Standard & Poor’s 500 index over the past few weeks.
GuruFocus’ Shiller price-earnings by sectors page shows the energy sector has a cyclically-adjusted price-earnings ratio of 15.20, the lowest ratio among all sectors. On the other hand, the ratio for the entire S&P 500 is 29.6, approximately 74.1% higher than the mean of 17.
Helmerich & Payne
Tulsa, Oklahoma-based Helmerich & Payne operates horizontal drilling wells for production of U.S. tight oil and gas. GuruFocus ranks the company’s financial strength and profitability 7 out of 10: Even though it has a poor Piotroski F-score of 4, Helmerich & Payne’s debt ratios outperform approximately 80% of global competitors, while profit margins outperform over 70% of global drilling companies.
Helmerich & Payne has a dividend yield of 7.31% and a Shiller price-earnings ratio of 11.57. Gurus with large holdings in the company include Ken Fisher (Trades, Portfolio) and Steven Cohen (Trades, Portfolio).
Schlumberger
Houston-based Schlumberger supplies energy products and services through several business segments, which include reservoir characterization, drilling, production and Cameron. GuruFocus ranks the company’s profitability 7 out of 10: Schlumberger has a three-star business predictability rank even though revenues have declined approximately 5.4% per year over the past three years, a rate that outperforms just 56.52% of global competitors.
Schlumberger’s 6.15% dividend yield is near a 10-year high and outperforms 83.95% of energy services companies. Likewise, the company’s Shiller price-earnings ratio of 12.55 outperforms 60.53% of global competitors.
Gurus with large holdings in Schlumberger include Dodge & Cox and First Eagle Investment (Trades, Portfolio). Matthew McLennan, a portfolio manager at the latter firm, will be our keynote speaker at next year’s value conference.
Exxon Mobil
Irving, Texas-based Exxon Mobil explores for, produces and refines oil around the world. GuruFocus ranks the company’s profitability 7 out of 10: Exxon Mobil’s business predictability ranks 2.5 stars out of five even though its three-year revenue growth rate of 4.6% underperforms 68.66% of global competitors.
Exxon Mobil has a dividend yield of 4.91% and a Shiller price-earnings ratio of 10.96. Gurus with large holdings in the company include First Eagle and Fisher.
Disclosure: No positions.
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