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Halliburton Company Retains Buy Recommendation

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Halliburton Company (NYSE: HAL) has been reiterated by TheStreet Ratings as a buy with a ratings score of A-. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.5%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $1,078.00 million or 38.56% when compared to the same quarter last year. In addition, HALLIBURTON CO has also modestly surpassed the industry average cash flow growth rate of 29.72%.
  • HAL's debt-to-equity ratio of 0.61 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 HAL's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.73 is high and demonstrates strong liquidity.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 70.97% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • HALLIBURTON CO has improved earnings per share by 21.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HALLIBURTON CO reported lower earnings of $2.77 versus $3.26 in the prior year. This year, the market expects an improvement in earnings ($3.13 versus $2.77).

Halliburton Company provides a range of services and products for the exploration, development, and production of oil and natural gas to oil and gas companies worldwide. The company operates in two segments, Completion and Production, and Drilling and Evaluation. Halliburton has a market cap of $45.4 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 26.00, above the S&P 500 P/E ratio of 18.00. Shares are up 56.2% year to date as of the close of trading on Thursday.

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

--Written by a member of TheStreet Ratings Staff.

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