Insights

This Company Is Up 33% in 2022 and Just Boosted Its Dividend by 40%. Time to Buy Now?

With many major stock market indices down year to date, some investors are scrambling to find a safe harbor for their hard-earned savings. One place they are turning to is the energy sector.
Energy has massively outperformed formerly hot sectors like tech, as market participants have gobbled up value stocks and ditched growth stocks. One such name is Schlumberger (NYSE: SLB), an oil and gas services giant that just boosted its quarterly dividend by 40%.
Image source: Getty Images.

Schlumberger’s first dividend hike in seven years is a good sign
Schlumberger reported first-quarter earnings results on April 22. The company reported solid results. Revenue grew 14% year over year to $6 billion. Adjusted earnings per share were $0.34, up 62% from a year earlier. Moreover, management had a pleasant surprise for shareholders — a dividend hike. 

SLB Dividend data by YCharts
Schlumberger increased its quarterly dividend from $0.125 per share to $0.17, starting with its July payment. This hike brings Schlumberger’s dividend yield (annual dividend payment/share price) to 1.79%. It’s a far cry from the $0.50 per share quarterly dividend the company was paying back in 2019, but still a welcome development.
Margins remain at the highest levels in years
Schlumberger’s first-quarter results were good but not spectacular. During its earnings call, management pointed out two significant headwinds that held back its performance: 
The war in Ukraine
Supply chain shortages
The war, along with new sanctions on Russia and the collapse of the Russian ruble, was one drag on Schlumberger’s results. The company has announced it is halting any new technology or investment deployments to Russia. The second big headwind was supply chain shortages. Like many businesses, Schlumberger noted delays in component delivery or that delivery costs rose during the first quarter. Despite these headwinds, Schlumberger still maintained its EBIT (earnings before interest and taxes) margin of 13.3%.

SLB EBIT Margin (TTM) data by YCharts
Is Schlumberger a buy now?
Despite these headwinds, management remains confident that 2022 will prove to be a good year. The company reported 14% overall revenue growth, with all four segments growing year over year. Moreover, first-quarter operating margins were the highest for the company since 2015.
More broadly, management still sees the larger macroeconomic environment as favorable. Energy demand remains tight, and Schlumberger sees a larger and longer cycle of energy industry investment in the coming years. As the best-of-breed oil service stock, that’s good news for Schlumberger. Add in the increased dividend, and the stock still looks like a buy today.
Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

With many major stock market indices down year to date, some investors are scrambling to find a safe harbor for their hard-earned savings. One place they are turning to is the energy sector.

Energy has massively outperformed formerly hot sectors like tech, as market participants have gobbled up value stocks and ditched growth stocks. One such name is Schlumberger (NYSE: SLB), an oil and gas services giant that just boosted its quarterly dividend by 40%.

Image source: Getty Images.

Schlumberger’s first dividend hike in seven years is a good sign

Schlumberger reported first-quarter earnings results on April 22. The company reported solid results. Revenue grew 14% year over year to $6 billion. Adjusted earnings per share were $0.34, up 62% from a year earlier. Moreover, management had a pleasant surprise for shareholders — a dividend hike. 

SLB Dividend data by YCharts

Schlumberger increased its quarterly dividend from $0.125 per share to $0.17, starting with its July payment. This hike brings Schlumberger’s dividend yield (annual dividend payment/share price) to 1.79%. It’s a far cry from the $0.50 per share quarterly dividend the company was paying back in 2019, but still a welcome development.

Margins remain at the highest levels in years

Schlumberger’s first-quarter results were good but not spectacular. During its earnings call, management pointed out two significant headwinds that held back its performance: 

The war in Ukraine
Supply chain shortages

The war, along with new sanctions on Russia and the collapse of the Russian ruble, was one drag on Schlumberger’s results. The company has announced it is halting any new technology or investment deployments to Russia. The second big headwind was supply chain shortages. Like many businesses, Schlumberger noted delays in component delivery or that delivery costs rose during the first quarter. Despite these headwinds, Schlumberger still maintained its EBIT (earnings before interest and taxes) margin of 13.3%.

SLB EBIT Margin (TTM) data by YCharts

Is Schlumberger a buy now?

Despite these headwinds, management remains confident that 2022 will prove to be a good year. The company reported 14% overall revenue growth, with all four segments growing year over year. Moreover, first-quarter operating margins were the highest for the company since 2015.

More broadly, management still sees the larger macroeconomic environment as favorable. Energy demand remains tight, and Schlumberger sees a larger and longer cycle of energy industry investment in the coming years. As the best-of-breed oil service stock, that’s good news for Schlumberger. Add in the increased dividend, and the stock still looks like a buy today.

Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!