April 13, 2025 a 06:05 am
SLB: Dividend Analysis - Schlumberger Limited
Schlumberger Limited, a cornerstone in the energy technology sector, showcases a compelling dividend profile with a substantial history of regular payouts. Although the dividend yield lies within a moderate range, the company's extensive 44-year dividend history underscores its commitment to shareholders. Recent fluctuations in dividend growth indicate challenges but reflect resilience in sustaining shareholder returns amidst dynamic market conditions.
📊 Overview
Schlumberger operates within the industrial sector, specifically focusing on energy services, which inherently entails cyclical revenue and cash flow characteristics. The firm's dividend yield, standing at 2.72%, highlights a moderate yield for income-focused investors, backed by a current dividend per share of $1.08. Its 44-year dividend history emphasizes reliability, although recent years saw a strategic reassessment of payouts.
| Parameter | Value |
|---|---|
| Sector | Industrial |
| Dividend yield | 2.72 % |
| Current dividend per share | $1.08 USD |
| Dividend history | 44 years |
| Last cut or suspension | None |
🗣️ Dividend History
The dividend historical trajectory provides insights into the company's strategic financial policies. Schlumberger’s history of uninterrupted dividends for over four decades is indicative of consistent cash flow generation capabilities. This historical stability fosters investor confidence and attracts dividend-oriented portfolios.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | $0.285 |
| 2024 | $1.100 |
| 2023 | $1.000 |
| 2022 | $0.650 |
| 2021 | $0.500 |
📈 Dividend Growth
Dividend growth is a critical indicator of a company's commitment to increasing shareholder returns over time. Schlumberger's three-year growth rate of 0.3% suggests minimal upward movement, while the five-year rate reflects a slight contraction at -0.11%, indicative of market adjustments or reinvestments in growth opportunities.
| Time | Growth |
|---|---|
| 3 years | 0.30 % |
| 5 years | -0.11 % |
The average dividend growth is -0.11% over 5 years. This shows moderate but steady dividend adjustments to align with market dynamics.
📉 Payout Ratio
Payout ratios offer a snapshot of dividend sustainability in relation to earnings and free cash flow. Schlumberger maintains a sound EPS-based payout ratio of 34% and a free cash flow-based ratio of 33.48%, reflecting prudent financial management that prioritizes dividend affordability and future flexibility.
| Key Figure | Ratio |
|---|---|
| EPS-based | 34.00 % |
| Free cash flow-based | 33.48 % |
These payout ratios suggest a well-managed dividend policy, with EPS and free cash flow coverage maintaining dividend stability and flexibility amidst market challenges.
📈 Cashflow & Capital Efficiency
Assessing cash flow and capital efficiency offers insight into cash generation capabilities and operational efficiency. Schlumberger's metrics indicate robust free cash flow yield and a balanced approach to capital expenditure, ensuring resources are effectively deployed to facilitate growth and sustain dividends.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 2.65% | 6.13% | 8.21% |
| Earnings Yield | 4.55% | 5.67% | 8.19% |
| CAPEX to Operating Cash Flow | 46.1% | 31.5% | 29.2% |
| Stock-based Compensation to Revenue | 1.11% | 0.88% | 0.87% |
| Free Cash Flow / Operating Cash Flow Ratio | 53.9% | 68.5% | 67.7% |
These metrics illustrate Schlumberger’s adept financial operations and capital allocation strategy, positioning it favorably for consistent dividend maintenance and strategic growth investments.
📊 Balance Sheet & Leverage Analysis
The company’s balance sheet strength and leverage metrics provide insights into financial stability and liquidity. The debt-to-equity and debt-to-assets ratios convey manageable debt levels aligning with operational efficacy and financial resilience.
| Ratio | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 0.680 | 0.592 | 0.721 |
| Debt-to-Assets | 0.283 | 0.249 | 0.247 |
| Debt-to-Capital | 0.405 | 0.372 | 0.419 |
| Net Debt to EBITDA | 1.64 | 1.20 | 1.06 |
| Current Ratio | 1.248 | 1.323 | 1.450 |
| Quick Ratio | 0.916 | 0.995 | 0.364 |
| Financial Leverage | 2.398 | 2.375 | 2.923 |
The liquidity and leverage structure support operational flexibility, maintaining liquidity and a sustainable capital structure conducive for future financial obligations.
📈 Fundamental Strength & Profitability
Profitability metrics reflect the company's operational effectiveness, indicating efficiency in resource utilization and growth potential. Schlumberger maintains competitive ROE, ROA, and profit margins, reinforcing its position in a competitive market environment.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 19.13% | 20.82% | 26.64% |
| Return on Assets | 7.98% | 8.76% | 9.12% |
| Net Profit Margin | 12.25% | 12.68% | 12.29% |
| EBIT Margin | 16.95% | 17.46% | 17.04% |
| EBITDA Margin | 22.89% | 22.77% | 22.24% |
| Gross Profit Margin | 18.37% | 19.81% | 20.56% |
| R&D to Revenue | 2.26% | 2.15% | 2.06% |
These profitability indicators reflect a robust operational framework, capable of generating healthy returns amidst challenging conditions in the energy sector.
📈 Price Development
✅ Dividend Scoring System
| Criterion | Score | Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 2 | |
| Payout ratio | 5 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 4 |
Total Score: 32/40
🗣️ Rating
Schlumberger Limited exhibits fundamental strength and prudent financial management, reflected in its stable dividend policies and robust financial metrics. However, while short-term dividend growth appears constrained, the company's strategic focus on maintaining cash flow stability and a strong balance sheet offers reassurance to investors seeking long-term value. It is recommended for conservative investors appreciative of steady income and potential capital appreciation through operational excellence.