5 Best Energy Stocks for Inflation

4. Schlumberger Limited (NYSE:SLB)

Number of Hedge Fund Holders: 58

Schlumberger Limited (NYSE:SLB) is a Texas-based company that provides technology for the energy industry worldwide. The company operates through four segments – Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. On July 22, Schlumberger Limited (NYSE:SLB) raised its full-year revenue guidance after a solid Q2 in which “growth was very broad across all dimensions”. The company expects $27 billion in revenue this year after soaring 20% in Q2 on the back of higher drilling and completion activity in its North America and International segments. The company also declared a $0.175 per share quarterly dividend, which is distributable on October 13 to shareholders of record on September 7. 

On July 25, Cowen analyst Marc Bianchi raised the price target on Schlumberger Limited (NYSE:SLB) to $49 from $47 and kept an Outperform rating on the shares. The analyst observed that guidance may be conservative but he still sees a multi-year up-cycle and his updated price target delivers 40% upside.

According to Insider Monkey’s data, 58 hedge funds were long Schlumberger Limited (NYSE:SLB) at the end of March, up from 47 funds in the earlier quarter. Rajiv Jain’s GQG Partners featured as the leading shareholder of the company, with roughly 28 million shares worth $1.15 billion. 

Here is what ClearBridge Investments has to say about Schlumberger Limited (NYSE:SLB) in its Q2 2021 investor letter:

“Schlumberger is a leading oilfield services company that should enjoy both cyclical and secular opportunities over the next market cycle and beyond. On the cyclical front, after years of declining energy service activity and negative pricing, service activity is increasing modestly and pricing is inflecting higher, which is always the key cyclical driver for energy services stocks. In addition, we expect the Middle East to gain share of oil production as ESG considerations limit upstream investment in other regions. As the dominant service provider in the Middle East, Schlumberger is very well-positioned for this shift. On the secular front, Schlumberger has a rapidly growing digital services capability that helps producers operate much more efficiently and with much less waste, which will be a core ESG focus. Finally, Schlumberger is investing directly, and with partners, in energy transition capabilities such as carbon capture, hydrogen and geothermal that should allow Schlumberger to grow and remain viable well beyond the current energy cycle.”