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Comparing Returns: Top 5 Oilfield Free Cash Flow Earners

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Comparing returns

We’ve been discussing the top five oilfield equipment and services (or OFS) companies by free cash flow generation in 3Q17 in this series. In this article, we’ll discuss their stock market returns. Year-to-date, Schlumberger (SLB) produced -23% returns up to December 19. Halliburton (HAL) outperformed SLB, with -15% year-to-date returns. National Oilwell Varco (NOV) outperformed both SLB and HAL, with -10% year-to-date returns.

Stocks versus ETFs and index

In comparison, since December 30, 2016, the Energy Select Sector SPDR ETF (XLE) has decreased 8%. The VanEck Vectors Oil Services ETF (OIH) witnessed -27% year-to-date returns. The Dow Jones Industrial Average (DJIA-INDEX) increased 24% year-to-date up to December 19. The SPDR S&P 500 ETF (SPY) has produced 20% returns during the same period. So, SLB—the top free cash flow earner in 3Q17—marginally outperformed the OFS industry ETF but hugely underperformed the broader energy industry ETFs and the broad equity market indexes.

Next, we’ll analyze the correlation between oilfield services stocks we discussed in this series with crude oil prices.

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