10 Most Undervalued Energy Stocks to Buy According to Hedge Funds

4. Schlumberger Limited (NYSE:SLB)

No. of Hedge Fund Holders: 80

Forward P/E Ratio as of May 2: 10.42

Schlumberger Limited (NYSE:SLB) is the world’s leading provider of technology for reservoir characterization, drilling, production, and processing to the global energy industry. The company’s clients include major oil and gas producers worldwide.

Schlumberger Limited (NYSE:SLB) slightly fell short of Wall Street consensus in Q1 2025, as its revenue of $8.49 billion missed estimates by $102.5 million. Latin America revenue fell 10% to $1.50 billion, with total international revenue declining 5% to $6.73 billion. However, North America posted an 8% YoY revenue increase, partly supported by strong growth in data center infrastructure. The company’s adjusted EPS of $0.72 also fell slightly below expectations by $0.01, primarily due to a significant reduction in drilling activity in Mexico. Given the recent volatility in the oil and gas industry, SLB has also made progress in expanding beyond fossil fuels, and its combined revenue from CCS, geothermal, critical minerals, and data center solutions is on pace to visibly exceed $1 billion in 2025.

Schlumberger Limited (NYSE:SLB)’s cash flow from operations more than doubled to $660 million in Q1 2025, while its free cash flow came in at $103 million. The company has committed to returning more than 50% of its free cash flow to shareholders and expects to return a minimum of $4 billion to shareholders through dividends and share repurchases this year.

Ariel Investments stated the following regarding Schlumberger Limited (NYSE:SLB) in its Q1 2025 investor letter:

“Additionally, we purchased Schlumberger Limited (NYSE:SLB), the largest oilfield services company in the world by revenue. SLB provides equipment, services and digital tools to help oil and gas producers operate more efficiently, including reservoir characterization, rig and well construction and production enhancement. We believe the company’s scale and technical expertise are key differentiators. Weak near-term demand, an oil glut, falling commodity prices and concerns about future spending amid a global shift to renewable energies presented an attractive entry point. We believe there are tailwinds supporting rising demand over the medium-term, as national oil companies invest in long-cycle projects to grow capacity and address the natural decline of production. Additionally, we expect SLB will continue to evolve their capabilities to help clients with rising energy needs going forward.”