- SLB is the world's largest oilfield services company and offshore driller.
- The company is experiencing a super cycle that will drive profits. t
- The dividend is expected to grow.
You want to know more about the SLB dividend. Well, this is the right place because by the end of this article you will understand what SLB dividend is, why the distribution was cut and why it is a good choice for income investors who can sustain a little risk.
The key takeaway for potential SLB investors is that SLB, formerly Schlumberger, is a multinational organization and the world’s largest oilfield services operator, period. This is key to know because the oilfield services industry is in the midst of a generational-quality super-cycle that began during the COVID-19 pandemic. This supercycle is expected to last for up to a decade or longer and will drive revenue, profits and capital gains for investors.
The real opportunity at this time is dividend increases. The oilfield services stocks are well-known, or were before the pandemic, as dividend growers. Because SLB cut its distribution to preserve capital and cash during the crisis it is in a position to not only increase its payment but to make a series of large annual increases that will help to drive share prices back to their all-time highs or higher.
Schlumberger Ltd. Overview
Schlumberger Ltd., doing business as SLB, is a global oilfield services company and the world’s largest offshore driller. The company operates out of 4 primary offices that are located in Paris, Houston, London and The Hague. The stock trades on the NYSE, Euronext, LSE and Swiss SIX exchanges and is a very wide and tightly held company.
SLB was founded in 1926 by two French brothers as the Electrical Prospecting Company. The two had experience conducting geophysical surveys throughout Europe and North America and went into business providing services and equipment. Among the company’s many feats is the 1st ever-recorded electrical resistivity test of a well, a test that is used today in the oil and gas industry to assess the structure of geological formations.
The company expanded its operations into the US and logged its 1st well there in 1929. By 1934 the brothers were opening the Schlumberger Well Survey Company in Houston, Texas. In 1948 the company opened its research division, the Schlumberger-Doll Research Center, and then in 1956 Schlumberger Ltd. was formed as the holding company for all Schlumberger business.
The company continued to grow via expansions and acquisitions until the COVID-19 pandemic hit. While the acquisitions did not end the company was forced to lay off about 25% of its workforce. Since then, it has been slowly rebuilding the workforce to meet the increasing demand from the industry.
The company’s latest innovations center around GHG and sustainability. It has made advances in carbon capture, methane control, and flare control that are driving a reduction in emissions globally. While the company is not shifting away from carbon-based energy, it is committed to advancing the industry in a sustainable manner.
SLB Dividend History
SLB is a regular dividend payer is not a consistent dividend grower. The company, aside from a distribution cut in 2020 related to the COVID-19 pandemic, has only ever increased its payment but not at a sustained, annual pace. For the first 25 years or so there were regular increases but that stopped in 2018 and carried through until 2021. Between those two times, the company’s payout fell from $0.50 per quarter or $2.00 annually to only $0.13 per quarter or $0.54 annually. This is a decline of 73% and the payout was not recovered by 2022 when others in the oil & gas industry were already reinstating theirs. Why buy dividend stocks? Because they pay you to own them and provide leverage for a portfolio.
Schlumberger Dividend Statistics
Schlumberger’s dividend was yielding about 1.35% in late 2022 and is expected to rise in the coming years. The payout ratio was also low at 32% which helped to drive the expectation for future increases. The only bad news at the time was the -20% CAGR which was due to the COVID-19-related distribution cut in 2020. Before that, Schlumberger had only ever increased its payment since the dividend’s first distribution in 1989.
Schlumberger Inside And Institutional Ownership
The insiders don’t hold a large amount of SLB stock but they do own some and they don’t sell it very often. The institutions, on the other hand, hold a great deal of the stock, more than 79% of it, and they have been buying it since 2021 and at an aggressive pace.
Schlumberger Analysts Activity
The analysts' sentiment in SLB stock warmed in 2021 and has the consensus rating up to a Moderate Buy from a firm Hold in the previous years. The warming sentiment was compounded by a rising price target that is leading the stock higher. The high price target has the stock at a new multi-year high and completing reversal in price action that should get the stock back up to all-time highs or higher by the time the super-cycle is over.
Schlumberger Debt Ratings
Schlumberger uses debt to finance growth, capex, and other corporate uses and is rated investment grade by all three major rating agencies.
SLB Dividend Growth CAGR
The SLB dividend history CAGR is the compound annual growth rate or the average growth rate of the dividend payment over a set number of years. It is an important metric for those who want to learn how dividend stocks work. This is usually expressed as a 3, 5, or 10-year CAGR and is used to gauge the rate of increase an investor can expect. Because dividend increases can offset the impact of inflation on investment dollars, the higher the better. SLB dividend history shows a mixed CAGR because of the pandemic-driven distribution cut but that is expected to improve significantly over the next decade.
Dividend Capture Strategy for SLB
Step #1 - Target The Dividend
The first step is to target the dividend you want to capture. Stocks like SLB are a good choice because they make regular payments that are well-telegraphed to the market. Once done, it’s time to go to the next step.
Step #2 - Buy The Stock
Once the dividend is targeted, it’s time to wait for the next declaration. Once declared, watch the stock price for an opportune entry point ahead of the ex-dividend date. The stock has to be owned at the close of business on the day before the ex-dividend date for the investor to receive the recently declared distribution amount.
Step #3 - Hold The Stock
This step is simple; all you have to do is hold the stock until the ex-Dividend Date, which is the next day.
Step #4 Sell The stock
This step is harder because the price of a stock typically falls by the dividend amount on the ex-dividend day. If a good entry was made, there should be ample margin to produce a profit from the now “captured” dividend payment. When should you sell a dividend stock? The best time is when you can make a profit.
Schlumberger Dividend Is Growing
Schlumberger cut its distribution during the pandemic and that was smart. The move didn’t hurt the share prices and has helped to ensure the balance sheet is still healthy. Now, the payment is as safe as ever and there is a robust outlook for dividend increases in the coming years. Not only is the company in good shape, but a supercycle in oil-field services is underway. That’s a good reason to buy a dividend stock. How to invest in dividend stocks. Very carefully.
Does SLB pay a dividend?
Does SLB pay dividends? Yes, it does. The company has a healthy cash flow and returns cash to its shareholders on a regular basis.
Does SLB pay monthly dividends?
SLB stock dividend is an annualized payment that is distributed in 4 quarterly payments. The payments are declared each quarter following board approval and the stock goes ex-dividend about 6 weeks later.
What is Schlumberger yield?
Schlumberger dividend yield has varied over time as the stock price changes and the distribution amount too. The yield in late 2022 was about 1.35% but that was after a COVID-19-related distribution cut that did little to hurt share prices.
Companies Mentioned in This Article:
|Company||Current Price||Price Change||Dividend Yield||P/E Ratio||Consensus Rating||Consensus Price Target|
|Schlumberger (SLB)||$44.57||-2.0%||2.24%||18.57||Moderate Buy||$62.38|