We assign a fundamental rating of 5 out of 10 to SLB. SLB was compared to 61 industry peers in the Energy Equipment & Services industry. SLB has an average financial health and profitability rating. SLB has a correct valuation and a medium growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

SLB had positive earnings in the past year.
In the past year SLB had a positive cash flow from operations.
In the past 5 years SLB has always been profitable.
Of the past 5 years SLB 4 years had a positive operating cash flow.

1.2 Ratios

SLB's Return On Assets of 6.62% is fine compared to the rest of the industry. SLB outperforms 78.69% of its industry peers.
SLB's Return On Equity of 14.22% is amongst the best of the industry. SLB outperforms 83.61% of its industry peers.
SLB has a Return On Invested Capital of 11.61%. This is amongst the best in the industry. SLB outperforms 88.52% of its industry peers.

		Industry Rank	Sector Rank
ROA	6.62%
ROE	14.22%
ROIC	11.61%

ROA(3y)N/A

ROA(5y)N/A

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

Looking at the Profit Margin, with a value of 10.34%, SLB belongs to the top of the industry, outperforming 83.61% of the companies in the same industry.
In the last couple of years the Profit Margin of SLB has declined.
The Operating Margin of SLB (16.78%) is better than 77.05% of its industry peers.
In the last couple of years the Operating Margin of SLB has grown nicely.
Looking at the Gross Margin, with a value of 19.75%, SLB is doing worse than 72.13% of the companies in the same industry.
In the last couple of years the Gross Margin of SLB has grown nicely.

		Industry Rank	Sector Rank
OM	16.78%
PM (TTM)	10.34%
GM	19.75%

OM growth 3Y1.13%

OM growth 5Y16.85%

PM growth 3Y-8.29%

PM growth 5YN/A

GM growth 3Y-0.27%

GM growth 5Y10.58%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SLB is still creating some value.
SLB has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

2.2 Solvency

An Altman-Z score of 3.08 indicates that SLB is not in any danger for bankruptcy at the moment.
The Altman-Z score of SLB (3.08) is better than 78.69% of its industry peers.
SLB has a debt to FCF ratio of 3.12. This is a good value and a sign of high solvency as SLB would need 3.12 years to pay back of all of its debts.
The Debt to FCF ratio of SLB (3.12) is better than 67.21% of its industry peers.
SLB has a Debt/Equity ratio of 0.42. This is a healthy value indicating a solid balance between debt and equity.
SLB has a Debt to Equity ratio (0.42) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0.42
Debt/FCF	3.12
Altman-Z	3.08

ROIC/WACC1.38

WACC8.4%

2.3 Liquidity

A Current Ratio of 1.39 indicates that SLB should not have too much problems paying its short term obligations.
The Current ratio of SLB (1.39) is worse than 73.77% of its industry peers.
SLB has a Quick Ratio of 1.01. This is a normal value and indicates that SLB is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.01, SLB is doing worse than 73.77% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.39
Quick Ratio	1.01

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

SLB shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -14.08%.
SLB shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 33.93% yearly.
The Revenue has decreased by -1.60% in the past year.
Measured over the past years, SLB shows a quite strong growth in Revenue. The Revenue has been growing by 8.63% on average per year.

EPS 1Y (TTM)-14.08%

EPS 3Y10.36%

EPS 5Y33.93%

EPS Q2Q%-15.22%

Revenue 1Y (TTM)-1.6%

Revenue growth 3Y8.33%

Revenue growth 5Y8.63%

Sales Q2Q%4.97%

3.2 Future

The Earnings Per Share is expected to grow by 7.68% on average over the next years.
SLB is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.56% yearly.

EPS Next Y0.65%

EPS Next 2Y7.37%

EPS Next 3Y8.5%

EPS Next 5Y7.68%

Revenue Next Year4.26%

Revenue Next 2Y4.39%

Revenue Next 3Y5.12%

Revenue Next 5Y4.56%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 17.29, SLB is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of SLB indicates a rather cheap valuation: SLB is cheaper than 80.33% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.87, SLB is valued a bit cheaper.
SLB is valuated rather expensively with a Price/Forward Earnings ratio of 17.18.
Based on the Price/Forward Earnings ratio, SLB is valued a bit cheaper than the industry average as 67.21% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.96, SLB is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	17.29
Fwd PE	17.18

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SLB indicates a slightly more expensive valuation: SLB is more expensive than 67.21% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as SLB.

		Industry Rank	Sector Rank
P/FCF	18.52
EV/EBITDA	9.78

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SLB does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of SLB may justify a higher PE ratio.

PEG (NY)26.58

PEG (5Y)0.51

EPS Next 2Y7.37%

EPS Next 3Y8.5%

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5. Dividend

5.1 Amount

SLB has a Yearly Dividend Yield of 2.40%.
SLB's Dividend Yield is rather good when compared to the industry average which is at 1.14. SLB pays more dividend than 81.97% of the companies in the same industry.
SLB's Dividend Yield is a higher than the S&P500 average which is at 1.82.

		Industry Rank	Sector Rank
Dividend Yield	2.4%

5.2 History

The dividend of SLB decreases each year by -11.53%.
SLB has paid a dividend for at least 10 years, which is a reliable track record.
SLB has not decreased its dividend in the last 3 years.

Dividend Growth(5Y)-11.53%

Div Incr Years3

Div Non Decr Years3

5.3 Sustainability

42.94% of the earnings are spent on dividend by SLB. This is a bit on the high side, but may be sustainable.

DP42.94%

EPS Next 2Y7.37%

EPS Next 3Y8.5%

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SLB LTD / SLB FAQ

What is the ChartMill fundamental rating of SLB LTD (SLB) stock?

ChartMill assigns a fundamental rating of 5 / 10 to SLB.

What is the valuation status for SLB stock?

ChartMill assigns a valuation rating of 4 / 10 to SLB LTD (SLB). This can be considered as Fairly Valued.

What is the profitability of SLB stock?

SLB LTD (SLB) has a profitability rating of 6 / 10.

What is the expected EPS growth for SLB LTD (SLB) stock?

The Earnings per Share (EPS) of SLB LTD (SLB) is expected to grow by 0.65% in the next year.

Can you provide the dividend sustainability for SLB stock?

The dividend rating of SLB LTD (SLB) is 5 / 10 and the dividend payout ratio is 42.94%.