National Oilwell Varco’s order backlog
As of September 30, 2016, National Oilwell Varco’s (NOV) order backlog in the Completion and Production Solutions segment was $812 million—down 16% compared to the end of 4Q15. The Rig Systems segment’s order backlog was ~$2.8 billion on September 30—down 55% from the end of 4Q15. New order additions were similar in the Completion and Production Solutions segment at $184 million—compared to $185 million in the Rig Systems segment in 3Q16. A lower order backlog can reduce National Oilwell Varco’s revenues. It can weigh on the returns as well.
Revenue as percentage of the backlog
In 3Q16, the revenue as a percentage of the backlog rose to 46%—compared to 36% a year ago. In comparison, Schlumberger’s (SLB) revenue as percentage of the backlog was ~165% in 3Q16. National Oilwell Varco accounts for 5.4% of the iShares US Oil Equipment & Services ETF (IEZ). The oil and gas equipment and services industry accounts for 78.6% of IEZ.
Next, we’ll discuss National Oilwell Varco’s dividends and dividend yields.