Today we're going to take a closer look at large-cap Energy company Halliburton Company, whose shares are currently trading at $39.07. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
Halliburton Company Has Elevated P/B and P/E Ratios:
Halliburton Company provides products and services to the energy industry worldwide. The company belongs to the Energy sector, which has an average price to earnings (P/E) ratio of 7.54 and an average price to book (P/B) ratio of 1.68. In contrast, Halliburton Company has a trailing 12 month P/E ratio of 14.4 and a P/B ratio of 4.04.
When we divideHalliburton Company's P/E ratio by its expected five-year EPS growth rate, we obtain a PEG ratio of 0.53, which indicates that the market is undervaluing the company's projected growth (a PEG ratio of 1 indicates a fairly valued company). Your analysis of the stock shouldn't end here. Rather, a good PEG ratio should alert you that it may be worthwhile to take a closer look at the stock.
Overview of the Company's Finances:
| 2018-02-09 | 2019-02-13 | 2020-02-11 | 2021-02-05 | 2022-02-04 | 2023-02-07 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $20,620 | $23,995 | $22,408 | $14,445 | $15,295 | $20,297 |
| Gross Margins | 11.0% | 12.0% | 10.0% | 11.0% | 13.0% | 16.0% |
| Operating Margins | 10% | 11% | 9% | 9% | 12% | 15% |
| Net Margins | -2.0% | 7.0% | -5.0% | -20.0% | 10.0% | 8.0% |
| Net Income (MM) | -$463 | $1,656 | -$1,131 | -$2,945 | $1,457 | $1,572 |
| Net Interest Expense (MM) | -$593 | -$554 | -$569 | -$505 | -$469 | -$375 |
| Depreciation & Amort. (MM) | -$1,556 | -$1,606 | -$1,625 | -$1,058 | -$904 | -$940 |
| Earnings Per Share | -$0.53 | $1.89 | -$1.29 | -$3.34 | $1.63 | $1.73 |
| EPS Growth | n/a | 456.6% | -168.25% | -158.91% | 148.8% | 6.13% |
| Diluted Shares (MM) | 870 | 877 | 875 | 881 | 894 | 908 |
| Free Cash Flow (MM) | $3,683 | $4,965 | $3,785 | $2,323 | $2,453 | $3,053 |
| Capital Expenditures (MM) | -$1,215 | -$1,808 | -$1,340 | -$442 | -$542 | -$811 |
| Net Current Assets (MM) | -$5,959 | -$5,287 | -$6,140 | -$6,222 | -$5,650 | -$4,326 |
| Long Term Debt (MM) | $10,430 | $10,421 | $10,316 | $9,132 | $9,127 | $7,928 |
Halliburton Company has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and a decent current ratio. In addition, we note an average amount of debt. We also note that the company benefits from strong margins with a positive growth rate and exceptional EPS growth. However, the firm has slimmer gross margins than its peers.
