Seadrill Ltd. (SDRL) is one of our High Yield Income Portfolio companies. Current annual dividend yield is over 9.3%.
The stock is trading at just 8.31x earnings. This is 40.91% less than 5 year average of 11.71x earnings.
Increasing revenues are coming from newbuild rigs that will enter the market over the next two years:
> Analysts at MSN are expecting Seadrill to lead the industry with a five year growth rate of 24.90% compared to the industry average of 13.30%.
> Bloomberg is expecting a significant increase in earnings over the next couple of years. The average estimate from 36 analysts is revenue to hit $6.2 billion in 2015. This represents an increase of 26.53% over the next 2 years.
This growth rate expectation leads to a PEG ratio of just 0.37.
This one is a Strong Buy for both Growth and Income.