Schlumberger Limited. (SLB), Halliburton Company (HAL), Baker Hughes Incorporated (BHI): Buy This Oil-Field Services Stock if…

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More often than not the best way to invest in a burgeoning growth industry is through “pick-and-shovel” plays. These are the companies that sell products and services to those companies doing the actual heavy lifting. As you’ve likely heard, the energy industry is in the midst of a growth boom. Investors looking to play along should take a look at one of the great “pick-and-shovel” plays found in the oilfield service industry.

To help you better determine which oilfield service stock you’ll want to buy, I’ve compiled the top reason why you’d want want each company in your portfolio.

…you want to own the 800-pound gorilla
With a market cap of over $100 billion Schlumberger Limited. (NYSE:SLB) is by far and away the 800-pound gorilla of the industry. The company employs more than 110,000 people in over 80 countries around the world. The company’s geographic diversity enables it to shift its focus on key geographies in order to keep growing.

It’s also teaming up with Cameron International Corporation (NYSE:CAM) in an effort to grow in the important subsea market. The company’s joint venture, OneSubsea, brings together the best of both companies in an effort to grow in the important deepwater marketplace. While the company’s not exactly cheap at 20 times earnings, it does pay a 1.5% dividend. Taken together, an investment in Schlumberger is an investment in the growth of global energy production.

…you want to own U.S. onshore fracking
To be fair, Halliburton Company (NYSE:HAL) also has global operations with more than 70,000 employees spread across 80 nations. However, at a market cap of $40 billion and half of its revenue from U.S. onshore, Halliburton is your play if you want to invest in the growth here at home.

While low natural gas prices had others in the industry pulling back, Halliburton was solidifying its relationships to gain business when drilling does pick back up. It’s shares offer a bit more of a value than Schlumberger, as it trades at around 15 times earnings, though its dividend is about half Schlumberger’s rate. The bottom line here, if you want to invest in fracking, Halliburton is your play.

…you want to own the growth of the Gulf of Mexico
Baker Hughes Incorporated (NYSE:BHI), too, has global operations. Though, it is the smallest of the three with just a $20 billion market cap. Its workforce stands just shy of 60,000 employees, which are spread across many of the same 80 countries as its peers.

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