National-Oilwell Varco, Inc. (NOV), Cameron International Corporation (CAM), ENSCO PLC (ESV): These Three Oil Service Companies Offer Stunning Value

Having said that, all three companies trade at price-to-sales ratios higher than the industry average, which I believe is warranted. Still, as a world leader in the oil equipment market, National Oilwell should trade at a higher price-to-earnings multiple than the rest of the industry, and Ensco’s profit margin deserves a higher valuation on a price-to-free-cash flow basis, as the company’s operating margin is more than double the industry average.

Foolish summary
I have covered National Oilwells and Cameron’s value more here. These three companies all offer stunning value in a generally undervalued sector. Oil is general considered to be a defensive sector, and there is no reason why oil service companies cannot be considered to offer the same defensive nature. National-Oilwell Varco, Inc. (NYSE:NOV) controls 60% of the global market for drilling equipment, and its low valuation does not justify its market dominance. In addition, Cameron is a world leader in the manufacture of high tech sub-sea blow-out preventing systems as well as land-based oil infrastructure related equipment, so demand for the companies services is unlikely to fall any time soon.Elsewhere, ENSCO PLC (NYSE:ESV)’s market-leading position means that the company’s drilling services will be required for many years to come, and the company offers investors a 3.5% dividend yield while they wait.