An intriguing aspect of Seadrill is its ability to attain rig leases that are slightly longer than industry norms. According to the company itself, Seadrill has an average contract length of 26 months, which is lengthier than the long-term averages of most peers, though Noble, for example, sports an average contract length of just over 39 months; generally, longer leases are something the industry is trending toward. This, in turn, leads to an increased certainty of future operations, which allows companies like Seadrill to use debt to fund growth and stimulate shareholder value.
S&P, for example, believes that deep-water rig counts in the Gulf of Mexico will continue to increase, from 33 before the Macondo spill and 37 by the end of last year, "to the mid-40s by 2013 year-end." The ratings agency cites the Gulf's "importance to the nation's future energy security" as a key reason to be bullish on this space over the long-term, and there is no harm in LNG investors also taking a look here when thinking about their energy portfolios as well.
In addition to its substantial dividend yield, Seadrill also sports a PEG ratio below 1.0, which indicates that the markets are undervaluing the company's growth prospects. To be fair, sell-side analysts are being pretty generous in their projections—forecasting 24-25% annual EPS growth through 2017. http://www.marketwatch.com/story/how-to-invest-in-dividends-like-george-soros-2013-06-04
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6/24/2013 @ 2:24PM |996 views
Notable Two Hundred Day Moving Average Cross - SDRL
Energy Stock Channel, Contributor
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In trading on Monday, shares of Seadrill SDRL +0.8% Ltd (NYSE: SDRL) crossed below their 200 day moving average of $38.58, changing hands as low as $37.60 per share. Seadrill Ltd shares are currently trading off about 3.9% on the day. The chart below shows the one year performance of SDRL shares, versus its 200 day moving average:
Seadrill Ltd 200 Day Moving Average Chart” />
Looking at the chart above, SDRL’s low point in its 52 week range is $32.35 per share, with $41.95 as the 52 week high point — that compares with a last trade of $37.68.
According to the ETF Finder at ETF Channel, SDRL makes up 4.55% of theOil Services ETF (AMEX: OIH)which is trading lower by about 2.9% on the day Monday.
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