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SLB, HAL, BHGE, and NOV: Comparing the Leverage

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Debt-to-equity ratios

Halliburton’s (HAL) debt-to-equity ratio is 1.1x—high compared to its peers. Baker Hughes (BHGE), Schlumberger (SLB), and National Oilwell Varco (NOV) have debt-to-equity ratios of 0.2x, 0.4x, and 0.2x, respectively. Their ratios remained relatively low and stable over two years.

As the above graph shows, Halliburton’s ratio has been on a downward trend over the last four quarters. Overall, the debt-to-equity levels for the four companies can be considered conservative.

Halliburton had total long-term debt of $10.5 billion. Schlumberger had a debt of $14.6 billion at the end of 2018. National Oilwell Varco’s total debt was $2.7 billion, while Baker Hughes’ debt was $6.3 billion at the end of 2018.

Debt-to-EBITDA ratios

For 2018, Halliburton and Schlumberger’s net debt-to-EBITDA ratios were ~2.0x. Baker Hughes’s net debt-to-EBITDA ratio was 0.9x, while National Oilwell Varco’s ratio was ~1.4x. In 2018, Halliburton repurchased ~10.5 million of its common shares for $400 million.

Together, Halliburton, Baker Hughes, Schlumberger, and National Oilwell Varco form ~44% of the VanEck Vectors Oil Services ETF (OIH).

To learn what institutional investors did with their holdings, read Schlumberger: Top Institutional Investors Increased Their Holdings.

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