11 Best Undervalued Energy Stocks to Invest in Now

4. Schlumberger (NYSE:SLB)

Forward P/E Ratio as of April 10: 10.31

Number of Hedge Fund Holders: 80

Schlumberger (NYSE:SLB) is an energy company that operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. It provides field development & hydrocarbon production, carbon management, and integration of adjacent energy systems, along with other related products and services.

The company’s Digital & Integration segment saw substantial growth in 2024, particularly in its Digital business, which experienced a 20% revenue improvement year-on-year. This was driven by the increasing adoption of digital solutions within the energy sector. Digital revenue reached $2.44 billion in 2024, with contributions from Cloud, AI, and Edge technologies, which grew by ~35%.

In Q4, Digital & Integration revenue was up by 6% sequentially due to a 10% growth in Digital revenue. The general demand for the company’s digital products and services is accelerating as customers use cloud computing, AI, and digital operations for enhanced efficiency and shortened cycle times.

Believing in the company’s long-term potential, Ariel Focus Fund stated the following regarding Schlumberger Limited (NYSE:SLB) in its Q4 2024 investor letter:

“Also in the quarter, we initiated a position in 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 serves as a key differentiator. 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.”