Comparing Performance: Top 5 Oilfield Stocks versus the Market
Top oilfield service stocks
In this article, we’ll compare stock price returns from the top five OFS (oilfield service) and equipment stocks according to expected earnings growth in 3Q17. Returns from many of these stocks have been positive since September 19, 2016.
As of September 18, 2017, National Oilwell Varco (NOV) stock had risen 7% in the past year, whereas Schlumberger (SLB) stock had fallen 11%. During the same period, Halliburton (HAL) stock had risen ~3%, Oceaneering International (OII) stock had risen 3%, and U.S. Silica Holdings (SLCA) lagged behind many of its OFS peers, falling 31%.
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Industry ETFs and the broad market index
Since September 19, 2016, NOV has strongly outperformed the VanEck Vectors Oil Services ETF (OIH), which has generated a -7% return. OIH tracks an index of 25 oilfield equipment and service companies. The Energy Select Sector SPDR ETF (XLE), representing the broader energy industry, has returned -2% since September 19, 2016. The top OFS stocks, however, have underperformed the SPDR S&P 500 ETF (SPY), which has returned 17%. The Dow Jones Industrial Average (DJIA-INDEX) has risen 23%.
Top OFS growth stocks versus crude oil and rigs
WTI (West Texas Intermediate) prices have recovered 15% in the past year, in contrast to crude oil’s fall of 7%. In 2016, WTI rose 45%. When crude oil prices recover, spending by oil exploration and production companies usually increases and OFS companies’ outlook improves, which explains why many of these companies’ stock prices have risen in the past year. The US rig count has continued to surge, rising 85% in the past year. For more about crude oil’s recent drivers, read How Major Oil Producers and the Dollar Are Driving Crude Prices. Next, we’ll compare returns from the bottom five OFS companies.