After Raising Its Dividend, is Halliburton Stock a Buy?

NYSE: HAL | Halliburton Company  News, Ratings, and Charts

HAL – Oil field services company Halliburton Company (HAL) recently beat Wall Street’s earnings expectations and increased its quarterly dividend. However, is it wise to buy the stock now amid uncertainty associated with rising COVID-19 cases? Let’s find out.

The oilfield contractor Halliburton Company (HAL) is currently trading 2.4% below its 52-week high of $32.13, which it hit on January 27, 2022, after raising its quarterly dividend by 166.7% year-over-year to $0.12 per share. For the fourth quarter, its revenues and adjusted EPS beat analysts’ expectations by 19% and 5.9%, respectively.

Also, the company announced that it will partly redeem its $1 billion of senior notes due in 2025 as part of its ongoing commitment to debt reduction. The stock has gained 36.1% over the past month to close yesterday’s trading session at $31.36. However, the rising COVID-19 cases, labor and supply shortages, and rising input costs make its near-term prospects look uncertain.

Here’s what could influence HAL’s performance in the upcoming months:

Solid Financials

HAL’s revenue increased 32.1% year-over-year to $4.28 billion for the fiscal fourth quarter ended December 31, 2021. The company’s adjusted operating income grew 57.1% year-over-year to $550 million, while its adjusted net income came in at $320 million representing a 100% year-over-year increase. Also, its adjusted EPS came in at $0.36, up 100% year-over-year.

Lower-than-Industry Profitability

In terms of trailing-12-month gross profit margin, HAL’s 13.33% is 67.4% lower than the industry average of 40.86%. Likewise, its trailing-12-month CAPEX/Sales of 5.22% is 33.6% lower than the industry average of 7.86%. Moreover, the stock’s trailing-12-month EBITDA margin of 17.29% is 17.5% lower than the industry average of 20.97%.

Stretched Valuation

In terms of forward P/B, HAL’s 3.63x is 112.1% higher than the industry average of 1.71x. Likewise, its forward P/CF of 11.06x is 83.1% higher than the industry average of 6.04x. Moreover, the stock’s forward non-GAAP P/E of 17.66x is 44.6% higher than the industry average of 12.22x.

POWR Ratings Reflect Uncertainty

HAL has an overall rating of C, which equates to a Neutral in our POWR Ratings system. The POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. HAL has a D grade for Stability, in sync with its beta of 2.76.

The stock has a C grade for Value, in sync with its higher-than-industry valuation ratios.

HAL is ranked #9 of 41 stocks in the D-rated Energy – Services industry. Click here to access HAL’s ratings for Growth, Sentiment, Quality, and Momentum as well.

Bottom Line

While HAL exhibited robust financial performance in the last reported quarter and raised its quarterly dividend, its lofty valuation and lower-than-industry profitability make the stock’s near-term prospects uncertain. So, it could be wise to wait for a better entry point in the stock.

How Does Halliburton (HAL) Stack Up Against its Peers?

While HAL has an overall POWR Rating of C, you might want to consider investing in the following Energy – Services stocks with an A (Strong Buy) or B (Buy) rating: Rex American Resources Corp. (REX), North American Construction Group Ltd. (NOA), and Subsea 7 S.A. (SUBCY).


HAL shares were trading at $30.59 per share on Monday afternoon, down $0.77 (-2.46%). Year-to-date, HAL has gained 33.76%, versus a -6.07% rise in the benchmark S&P 500 index during the same period.


About the Author: Nimesh Jaiswal


Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
HALGet RatingGet RatingGet Rating
REXGet RatingGet RatingGet Rating
NOAGet RatingGet RatingGet Rating
SUBCYGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Inflation Not Fading Fast Enough for Stock Investors

Investors may have celebrated the end of high inflation too soon. The CPI report shows inflation bouncing higher and thus pushing back the start date for Fed rate cuts. This has the S&P 500 (SPY) coming off recent highs. This begs questions like how much more downside could we see? And when will the bull market get back on track? 44 year investment veteran Steve Reitmeister shares his answers to these questions in this timely commentary including a preview of his top picks to stay ahead of the pack. Read on below for more...

3 Auto Stocks to Consider Over TSLA in April

Tesla (TSLA) reported a decline in deliveries in the first quarter, and Wall Street expects the company to deliver fewer vehicles than last year. Furthermore, rising competition, slowing EV sales, and stretched valuation make TSLA unattractive from an investment standpoint. Considering these factors, investors could consider buying fundamentally strong auto stocks Blue Bird (BLBD), Rolls-Royce Holdings (RYCEY), and Stellantis (STLA) over Tesla (TSLA). Read more...

3 Top-Rated Tech Stock Buys for Value in April

The technology sector is undergoing a notable surge, propelled by increasing digitalization endeavors among businesses and governmental support for technological progress. So, fundamentally sound tech stocks Box Inc. (BOX), Teradata (TDC), and Materialise (MTLS), which seem pretty undervalued, might be ideal buys this month. Continue reading...

Top Software Stocks at the Forefront of Market Gains

The software industry's prospects appear bright due to increasing investments in digital transformation, high demand for advanced software services from various sectors, and the integration of emerging technologies such as generative AI. Therefore, investors could consider buying quality software stocks Autodesk (ADSK), DocuSign (DOCU), and Pegasystems (PEGA) for solid gains. Read more...

Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

Read More Stories

More Halliburton Company (HAL) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All HAL News