NEW YORK (TheStreet) -- Halliburton (HAL) - Get Report shares are up 0.14% to $43.12 in trading on Friday after shareholders voted to approve a merger between Halliburton and Baker Hughes (BHI) in a transaction valued at approximately $35 billion.

The two oilfield services companies are still waiting on regulatory approval of the merger though it is expected that the deal will close in the second half of this year. Last month U.S. regulators asked the two company's for more details about the merger which was first announced in November. 

Halliburton has previously said that it would be willing to divest assets with annual revenue of up to $7.5 billion in order to receive regulatory approval, according to Reuters.

The merger would allow two of the largest oilfield service companies to better compete with world leader Schlumberger (SLB) - Get Report at a time when oil companies around the world are cutting capital expenditure budgets as oil prices continue their sharp decline that started last summer.

"We are more confident than ever that this combination will create a stronger, more diverse organization with an unsurpassed depth and breadth of services benefitting our stockholders, customers, employees and other key stakeholders of both companies," said Halliburton CEO Dave Lesar.

The Street's Jim Cramer, Portfolio Manager of Action Alerts PLUS Charitable Trust Portfolio, believes that the combination of the two companies will have positive implications for rival Schlumberger.

Meanwhile, we believe a Halliburton/Baker Hughes combination will have positive implications for Schlumberger. While the combined entity will be able to compete more effectively, the consolidation will remove a formidable competitor from the market and will in all likelihood lead to favorable impacts on pricing. In particular, the merger could result in a virtual duopoly for integrated projects, where scope is critical.

TheStreet Ratings team rates HALLIBURTON CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate HALLIBURTON CO (HAL) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HAL's revenue growth has slightly outpaced the industry average of 14.5%. Since the same quarter one year prior, revenues rose by 14.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Energy Equipment & Services industry average. The net income increased by 13.6% when compared to the same quarter one year prior, going from $793.00 million to $901.00 million.
  • Despite currently having a low debt-to-equity ratio of 0.48, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that HAL's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.68 is high and demonstrates strong liquidity.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, HALLIBURTON CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: HAL Ratings Report

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