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Nabors Industries Ltd Stock Hold Recommendation Reiterated (NBR)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Nabors Industries (NYSE: NBR) has been reiterated by TheStreet Ratings as a hold with a ratings score of C . The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.4%. Since the same quarter one year prior, revenues slightly increased by 9.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 60.20% to $382.86 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 19.77%.
  • NBR's debt-to-equity ratio of 0.79 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that NBR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.89 is high and demonstrates strong liquidity.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.65%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 26.66% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, NABORS INDUSTRIES LTD's return on equity significantly trails that of both the industry average and the S&P 500.

Nabors Industries Ltd., together with its subsidiaries, operates as a land drilling contractor worldwide. Nabors has a market cap of $3.89 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 19.4, above the S&P 500 P/E ratio of 17.7. Shares are down 23.4% year to date as of the close of trading on Wednesday.

You can view the full Nabors Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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