Beaten Down Drillers: Value Case For Seadrill Ltd

Seadrill Ltd (NYSE:SDRL) does oil and gas drilling exploration. The stock has fallen from a 52 week high of $47.28 to its current price of $24.50. The big question is, can Seadrill find support and bounce at this level? Is there value here?

First, Seadrill Ltd is a profitable company who is expected to make $3.05 in EPS in 2014 and $3.38 in 2015. The forward P/E for 2015 is 7.25. That puts it at a very reasonable valuation. Second and most importantly, the dividend yield is over 16% at current levels. What stock is paying that type of dividend? Now, it must be mentioned that there is an expectation for them to cut their dividend, but even a 40% cut, still puts it at a 10% yield. What profitable company is paying that type of dividend these days?

These factors make Seadrill Ltd very attractive at current levels.

Gareth Soloway
InTheMoneyStocks.com