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01/13/2015 7:00 am EST
With revenues approaching $50 billion, our top speculative pick for 2015 is the world’s leading supplier of technology, project management, and information solutions to the international oil and gas exploration industry, notes Ingrid Hendershot, editor of Hendershot Investments.
With 125 research and engineering facilities worldwide, Schlumberger (SLB) places strong emphasis on developing innovative technology that adds value for their customers.
In 2013, the company invested $1.2 billion in research and engineering to remain at the forefront of technology development.
Schlumberger’s size and scale of its operations provides the company with significant strength. To further increase its competitive advantages, the company has been implementing a series of initiatives to leverage the size of their operations.
Schlumberger has generated strong cash flows over the past decade with free cash flow gushing from $680 million in 2004 to more than $6.5 billion in the past trailing 12 months.
The company has been generous in sharing this cash with shareholders through growing dividends and share repurchases.
Over the past three fiscal years, Schlumberger has distributed $4.3 billion in dividends and repurchased $6.6 billion of its shares.
With a relatively low dividend payout, the company’s reservoir of cash should enable management to continue to drill up higher dividends in the years ahead.
Schlumberger’s stock price pullback has created a slick buying opportunity into this high quality company, which is a global market leader with growing cash flows and an outlook for double-digit EPS growth through 2017.