We Gave This Stock a 10/10

[View in browser]( [The Juice Logo] BROUGHT TO YOU BY: [Logo]( Editor’s Note It’s Friday. Time to give you a stock pick from our sister newsletter, The Spill, so you can think about it over the weekend and maybe make a move Monday morning. While The Juice helps you be better with money across the board, The Spill focuses on stocks financial pros are researching and judges how good of buys they are. If you’re already sold, [you can sign up for The Spill – for free – here.]( [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D636767?utm_medium=ic-nl&utm_source=123569 ) We Gave This Stock a 10/10 Every barrel of oil pumped from the ground likely owes a debt to a company you might not know by name: [SLB (Schlumberger)](. This energy services titan has been the backbone of the oil and gas industry for nearly a century, providing the technology and expertise that keeps the world's energy flowing. Yet, as the global push for clean energy gains momentum, SLB faces a pivotal challenge. The company is betting big on digital transformation, artificial intelligence, and even sustainable lithium production to secure its future in a rapidly evolving energy landscape. Our TrackStar data shows a recent uptick in interest from financial professionals and retail investors, particularly following SLB's strong Q3 2024 results and the announcement of its new Lumi AI platform. But can a company so deeply rooted in fossil fuels successfully pivot to the digital age? However, the stock's performance has been relatively muted, up only modestly year-to-date despite the company's robust financial metrics. So, is SLB a hidden gem poised for a breakout, or is it fighting a losing battle against the tide of renewable energy? Schlumberger’s Business SLB's technology touches nearly every drop of oil and cubic foot of gas produced globally. As the world's largest oilfield services company, SLB has been at the forefront of energy innovation since 1926, continually pushing the boundaries of what's possible in oil and gas extraction. Operating across more than 120 countries, SLB offers a comprehensive suite of services that span the entire lifecycle of oil and gas fields. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D636767?utm_medium=ic-nl&utm_source=123569 ) Brought to you by [Paradigm Press]( [Elon Musk’s Genius Plan to Save the US Dollar from Collapse?]( [ Paradigm Press - Elon Musk’s Genius Plan to Save the US Dollar from Collapse?]( If you’re holding any US dollars, you need to click here to see what Elon Musk is up to now… Because he’s planning to use the two biggest technologies of our century… To completely reshape how we deal with money. Could this save the US dollar from a complete collapse? This could be the biggest change to our financial system since the creation of the Federal Reserve in 1913. [You need this info before that happens.]( Continued... The company's expertise touches every aspect of energy extraction and management, from cutting-edge seismic surveys to advanced production optimization techniques. SLB segments its business into four key areas: - Digital & Integration (12% of total revenues) - Delivers AI-driven platforms and digital solutions for the energy sector. - Reservoir Performance (20% of total revenues) - Provides reservoir characterization and well testing services. - Well Construction (36% of total revenues) - Offers drilling technologies and well construction services. - Production Systems (34% of total revenues) - Supplies production systems and artificial lift technologies. In the third quarter of 2024, SLB demonstrated strong financial performance with revenue reaching $9.16 billion, a 10% increase year-on-year. The company's adjusted EBITDA margin expanded to an impressive 25.6%, marking its highest level since early 2016. SLB is actively pursuing strategic initiatives to maintain its industry leadership. The launch of the Lumi data and AI platform represents a significant step forward in digital innovation, positioning SLB at the forefront of the energy sector's digital transformation. Diversification efforts have led SLB into new territories, including sustainable lithium production. Using proprietary technology, the company has achieved breakthrough results in lithium extraction, potentially opening up new revenue streams in the growing electric vehicle market. In a move to optimize its portfolio, SLB recently announced the sale of its Palliser asset in Canada. This strategic divestment aims to reduce exposure to commodity price volatility and improve the company's overall financial position, demonstrating SLB's commitment to maintaining a strong and adaptable business model in a dynamic energy landscape. Financials [Financials] Source: Stock Analysis SLB's Q3 2024 results showcase a company successfully navigating the transition from traditional oilfield services to a digital energy future. Revenue surged 12.4% year-over-year to $16.0 billion, outpacing the TTM figure of $33.9 billion and signaling accelerated growth. At the heart of this growth is SLB's Digital & Integration segment. While only 12% of revenues, it's the fastest-growing division and a key driver of margin expansion. The recent launch of the Lumi AI platform underscores SLB's commitment to leading the digital revolution in energy. This digital push is paying off. Q3's net income hit $4.5 billion, up 7.8% year-over-year, while free cash flow soared to $4.2 billion – more than double the TTM figure. Meanwhile, SLB's traditional segments remain robust. Gross and operating margins held steady at 20.4% and 17.2% respectively, demonstrating SLB's ability to maintain efficiency while pivoting towards new technologies. Despite these strong financials, SLB's stock performance has been muted. The company's 2.6% dividend yield is modest. Yet, management stated they planed to return $4 billion to shareholders in 2024 and $5 billion in 2025, which yields 6.8% and 8.4% respectively. Valuation [valuation] Source: Seeking Alpha SLB’s valuation puts it at the cheaper end of the group, with a 13.5x P/E and 9.2x price to cash ratio compared to [Baker Hughes’ (BKR)]( 18.5x and 12.6x or [Tidewater’s (TDW)]( 20.6x and 15.1x respectively. However, SLB isn’t as cheap as [Haliburton (HAL)]( or [Nov (NOV)](, both of which trade under 10x on both measures. Growth [Growth] Source: Seeking Alpha SLB’s premium over Haliburton and Nov comes thanks to its strong sales growth in recent years and its outlook. Tidewater is the only company listed here that expects revenue growth above SLB’s 12.6% in 2024. Interestingly, Tidewater matches SLB’s free-cash-flow growth average for the past three years at +40%, with only Haliburton delivering higher numbers. Profitability [Profit] Source: Seeking Alpha All the companies listed here run similar gross margins except Tidewater. And SLB and Haliburton run similar EBIT, net income, and free cash flow margins. Yet, Haliburton shows better returns on equity, assets, and total capital than SLB despite yielding a bit more than half of the cash from operations that SLB generates. [The AI Boom Has Arrived—Don’t Miss Your Chance to Get In!]( Artificial Intelligence is set to skyrocket into a $100 trillion industry, presenting savvy investors with a once-in-a-lifetime opportunity to profit. Renowned industry expert James Altucher shares his top strategies to help you capitalize on this trend. But time is of the essence—this “wealth window” on AI is closing rapidly! Act now to gain the upper hand before the rest of the world catches on. [Watch the Free Video Now]([Ad] Our Opinion 10/10 We like SLB’s value here trading at just 12.5x forward earnings and 7.8x forward cash flows. Management has also committed to keeping debt in check, paying back shareholders from its cash flows. The stock hasn’t done well as oil prices fell and drilling has declined. Yet, we expect the core business to pick up in 2025 alongside continued growth from digital services. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D636767?utm_medium=ic-nl&utm_source=123569 ) Proprietary Data Insights Top Oil & Gas Service Stock Searches in the Last Month Rank Ticker Name Searches #1 [SLB]( 17,554 #2 [HAL]( Halliburton 10,174 #3 [BKR]( Baker Hughes 5,136 #4 [TDW]( Tidewater 3,443 #5 [NOV]( Nov 2,310 #ad [The new (and better) way to invest in gold]( News & Insights Freshly Squeezed - [One Of Our Top Stock Picks Doubled And Still Has Room To Run]( - [Adding Color to the Investment Spectrum]( - [53% Of Gen Z And Millennials Spend Over Half Their Income On Housing]( - [3 Types Of ETFs You Need To Know About]( [News & Insights-facebook-share]( [News & Insights-twitter-share]( [News & Insights-linkedin-share]( [News & Insights-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D636767?utm_medium=ic-nl&utm_source=123569 ) [We want to hear from you. 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