Is Schlumberger Limited. (SLB) a Good Stock to Buy?

Earnings have recently been low for the company, and sales growth has been more limited than it has been for its larger peer. However, the sell-side expects Halliburton to rebound and so it trades at a small discount to Schlumberger on a forward earnings basis with a P/E of 11. Expectations for continued growth yield a five-year PEG ratio of 0.7, though it may be best to wait for the company’s actual results to improve before considering it as a value play.

Another peer in oilfield services is Weatherford International Ltd (NYSE:WFT). It is another company which has been struggling recently, going by recent reports, though as with Halliburton analysts seem to expect that general improvements in the industry will strengthen its bottom line. Weatherford is valued at 11 times forward earnings estimates, even with Halliburton on that basis, and also posts a five-year PEG ratio below 1. As with that stock it seems a bit risky to buy based entirely on the Street’s confidence in the 2014 numbers.

As a result investors interested in oilfield services investments should probably start by looking at Schlumberger at least for now, at least out of the companies which have been discussed here. Weatherford and Halliburton do feature lower forward P/Es but in each case the forward expectations incorporate a good deal of expected EPS growth next year from what are currently less appealing levels.

Disclosure: I own no shares of any stocks mentioned in this article.