Schlumberger Limited. (SLB) vs. Halliburton Company (NYSE:HAL): Is It Still Close?

However, that’s not so when Baker Hughes (NYSE:BHI) is pulled into the mix. While this company has always had strong potential, it was affected much worse by the weak demand in North America. And, unfortunately, Baker Hughes didn’t have the strong international exposure to help offset the tough demand conditions. Consequently, the company recently missed recent EPS estimates by $0.13.

Plus, although Baker Hughes beat on the top line by posting $5.55 billion, it represented a year-over-year decline of 3%. But it wasn’t all bad. Amid an obviously brutal quarter, the company was able to post a modest 2% increase in international rig count. Plus, investors should be encouraged that it was able to grow international revenues by 11%. But Baker Hughes is still a bit far behind Halliburton and several oil fields away from Schlumberger.

Plus, that both Schlumberger and Halliburton advanced revenue in Q4 is certainly encouraging. But they both underperformed on the bottom line. Ordinarily, this wouldn’t offer a compelling reason to own either stock since this industry is about growing EBITDA, but the sector can’t lag forever. From that standpoint, Schlumberger wins. And if the latter can trade at 10 times forward EBITDA, this stock can offer a 12.5% premium from current levels. This would suggest a price target of around $90 per share. I think it’s worth a gamble.

The article Schlumberger vs. Halliburton: Is It Still Close? originally appeared on Fool.com.

Fool contributor Richard Saintvilus has no position in any stocks mentioned. The Motley Fool recommends Halliburton.

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