Investors should take notice of NYSE:SDRL—it offers a great deal for the fundamentals it presents.

Last update: Oct 17, 2024

SEADRILL LIMITED (NYSE:SDRL) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NYSE:SDRL showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Assessing Valuation Metrics for NYSE:SDRL

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:SDRL has achieved a 7 out of 10:

The Price/Earnings ratio is 10.41, which indicates a very decent valuation of SDRL.
86.44% of the companies in the same industry are more expensive than SDRL, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 31.76. SDRL is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 7.41 indicates a rather cheap valuation of SDRL.
79.66% of the companies in the same industry are more expensive than SDRL, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of SDRL to the average of the S&P500 Index (22.74), we can say SDRL is valued rather cheaply.
76.27% of the companies in the same industry are more expensive than SDRL, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, SDRL is valued a bit cheaper than the industry average as 62.71% of the companies are valued more expensively.
A more expensive valuation may be justified as SDRL's earnings are expected to grow with 30.05% in the coming years.

A Closer Look at Profitability for NYSE:SDRL

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:SDRL was assigned a score of 5 for profitability:

SDRL has a Return On Assets of 11.08%. This is amongst the best in the industry. SDRL outperforms 88.14% of its industry peers.
With a decent Return On Equity value of 15.56%, SDRL is doing good in the industry, outperforming 74.58% of the companies in the same industry.
Looking at the Profit Margin, with a value of 30.43%, SDRL belongs to the top of the industry, outperforming 98.31% of the companies in the same industry.
SDRL has a better Operating Margin (21.55%) than 84.75% of its industry peers.
Looking at the Gross Margin, with a value of 37.02%, SDRL is in the better half of the industry, outperforming 71.19% of the companies in the same industry.
SDRL's Gross Margin has improved in the last couple of years.

Health Assessment of NYSE:SDRL

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:SDRL scores a 7 out of 10:

SDRL has a better Altman-Z score (2.37) than 64.41% of its industry peers.
The Debt to FCF ratio of SDRL is 2.79, which is a good value as it means it would take SDRL, 2.79 years of fcf income to pay off all of its debts.
SDRL has a better Debt to FCF ratio (2.79) than 66.10% of its industry peers.
SDRL has a Debt/Equity ratio of 0.20. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of SDRL (0.20) is better than 62.71% of its industry peers.
SDRL has a Current Ratio of 3.19. This indicates that SDRL is financially healthy and has no problem in meeting its short term obligations.
SDRL's Current ratio of 3.19 is amongst the best of the industry. SDRL outperforms 84.75% of its industry peers.
SDRL has a Quick Ratio of 3.19. This indicates that SDRL is financially healthy and has no problem in meeting its short term obligations.
SDRL has a Quick ratio of 3.19. This is amongst the best in the industry. SDRL outperforms 91.53% of its industry peers.

What does the Growth looks like for NYSE:SDRL

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:SDRL was assigned a score of 6 for growth:

SDRL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 203.42%, which is quite impressive.
Looking at the last year, SDRL shows a very strong growth in Revenue. The Revenue has grown by 48.42%.
Measured over the past years, SDRL shows a quite strong growth in Revenue. The Revenue has been growing by 12.35% on average per year.
SDRL is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 30.05% yearly.
The Revenue is expected to grow by 10.35% on average over the next years. This is quite good.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of SDRL for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.