Seadrill Ltd (SDRL): Three Ways to Profit From Offshore Drilling

After a year of earnings disappointments in 2012, GulfMark Offshore, Inc. (NYSE:GLF) appears headed towards better times. Its past two quarters have beaten earnings estimates and management sounded decidedly optimistic about the future. Specifically, GulfMark believes the combination of increased business in the Gulf of Mexico, the North Sea, and especially Southeast Asia, coupled with its acquisition of newly built ships, will propel significant earnings going forward.

Right now, GulfMark Offshore, Inc. (NYSE:GLF) seems to have some optimism already built into its current price as the stock trades at over 53 times earnings. Again, its most recent quarterly earnings did surpass expectations, its offshore operations in the Gulf of Mexico were stronger than expected, and offshore drilling, in general, looks to grow. Still, 53 times earnings? Looks a bit pricey to me.

Final Foolish thoughts

Fool contributor Matt DiLallo has pointed out that for oil services, the money is either offshore or overseas. All three of these companies operate in either or both markets. For all around returns, I like Seadrill Ltd (NYSE:SDRL) best. The combination of 8% yield and capital gains potential holds great appeal. Bristow Group Inc (NYSE:BRS) looks like a good growth company in a hot industry. It’s P/E and PEG ratios are reasonable given its earnings potential; an income stock it is not, at least, not yet.

The article 3 Ways to Profit From Offshore Drilling originally appeared on Fool.com.

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