Baker Hughes Incorporated (BHI), Goldman Sachs Group Inc (GS): Which Oil Service Name to Buy Among Polarized Views From the Street?

CS, however, believes that land drilling has seen some tough times recently, and this is going to be reflected in the results of all industry players like Nabors Industries Ltd. (NYSE:NBR). Land drilling margins will take the biggest step down this quarter, which is largely driven by the sustained effects of contract re-pricing last year.

Moreover, a decline in margins of certain segments of Nabors Industries Ltd. (NYSE:NBR) is expected, given that the pressure pumping market remains ~20% overcapacity and large players like Halliburton Company (NYSE:HAL) and Baker Hughes are becoming more aggressive in winning the coveted 24-hour contracts. Similarly, Well servicing has not seen improvement, as demand remains low for work over rig services as horizontal wells have seen any meaningful remediation work done. CanRig (Nabors Industries Ltd. (NYSE:NBR) segment for well servicing) orders are expected to be down ~50% sequentially as new-builds enter the market at more tempered pace.

What about Halliburton Company (NYSE:HAL)?

Halliburton Company (NYSE:HAL) has been recommended as a buy by both CS and Goldman. Both believe that the company will use its heavy cash reserves to execute share repurchases. The company has approximately $1 billion at its disposal that can be put to this use.

Both believe that the company has a superior position in North America, its Clean Stim fractionation fluid project is picking pace with market share increasing from 7% last year to 32% in 2013. North American margins should get a 100 basis point improvement in the second quarter due to lower guar inventory levels. 75% of the pressure pumping fleet is doing 24-hour work, 85% is contracted, and the effective utilization is 60%-70% which is a phenomenal rate.

Both agree that the company is suffering in Mexico given sluggish growth in Latin American region. However, this will be offset by strength in North America.

Final word

To find a common rating on companies is often an easy way to invest and make money. Halliburton Company (NYSE:HAL) seems to receive favorable comments across the Street and hence is recommended as a buy given the confidence that analyst have put in the stock despite its +30% performance since the start of the year.

The article Which Oil Service Name to Buy Among Polarized Views From the Street? originally appeared on Fool.com and is written by Zain Abbas.

Zain Abbas has no position in any stocks mentioned. The Motley Fool recommends Halliburton. Zain is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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