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Sunday, 12/11/2005

Supplying Gains
By Nich Sheldon
HAL - Halliburton Co.

Company Description

Halliburton, founded in 1919, is one of the world's largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services Group and KBR. Visit the company's World Wide Web site at www.halliburton.com.

[Source: Company Press Release]

Reasons to Invest:

This week’s Drip of the Week (DOTW) looks financially stable, technically sound, and is estimated to gain anywhere from 11 to 20 points over the course of the next year. Crudely put, this week’s DOTW is Halliburton Co. (NYSE:HAL); HAL supplies engineering, construction, and maintenance services to big energy, industry, and government agencies across the globe.

After reading the current articles surrounding HAL, I must say that I was unable to find any deflating news releases. In fact, most of the buzz surrounding this stock is positive to upbeat. Furthermore HAL is a recommended stock pick on some analysts’ wish list.

One press release noted that Halliburton served more than 170,000 troops Thanksgiving Dinner. It’s easy to see the relationship that HAL has with these troops, when one starts to think about where this Crude player is positioned globally. The company stands shoulder-to-shoulder with America’s best in the Middle East, as well as in Central Asia.

Halliburton’s very own GeoGraphix brand recently released its GeoGraphix Discovery(TM) Software. The company said, “this new technology enhances the efficiency and effectiveness of E&P decision-making processes through better team collaboration and subsurface data management” (11/08/05). New software, such as, GeoGraphix, should help the company continue to see gains over the fourth quarter of 2005.

As far as the long-term outlook goes, HAL’s chart looks phenomenal. Since August of 2002 the chart has added over 43 points in value, which is close to a 200% gain over the August 17th, 2004 low of 26.45.

The Daily chart shows a buy signal on both the Stochastics and the MACD indicators. On the other hand, a bullish crossover is about to take place on the Weekly MACD indicator, while the Stochastics indicator grows ever closer to the overbought side. As the bullish and bearish lines of the Stochastics indicator get closer to overbought territory, we will start to see more consolidation and sideways movements, filled with bearish and bullish crossovers alike.

This short-term consolidation shouldn’t trouble us long-term investors. Besides, the Monthly chart shows a strong trend of higher highs in a tightly knit regression channel. Both the MACD and Stochastics indicators are giving off strong buy signals, and HAL’s average trading volume has picked up strength over the past few months, which are both indications of further prosperity.

Furthermore, five out of the past six quarters have closed in the green. In fact, the stock just posted its first losing quarter in a year and a half. Speculation suggests that the stock is just taking a much-needed breather. While the stock has begun to lose some of its steam, it has started to form a foundation of support, which bodes well for further gains.

Halliburton’s market cap is nearly 34 billion, and the company employees nearly 100,000 employees. Twenty-one Analysts are currently covering the stock. The mean price target for the stock is 74.67, while the median target is 75, and the high target is 83. Yet, if you were to look a the Point-and-Figure chart, one would notice a traditional, 3 box reversal chart pattern with a bullish price objective of 86.00. As noted earlier, analysts believe that HAL will gain up to 20 points in the next year, which would be an increase of approximately 30% over the course of one year.

The company is guesstimating an increase in earnings of 0.59, for a total EPS of 3.68 over the course of 2006. Halliburton also foresees their average revenues increasing to 21.76 billion next year, from 20.52 billion this year. HAL forecasts a growth estimate of 19.1% over the next year, which is impressive when you ponder the company’s previous 5-year growth of 14.5%.

Normally, I would not recommend a Dividend Re-Investment trade unless there was a sizeable annual yield. Nonetheless, I am making an exception for this week’s DOTW. HAL pays an annual dividend of $0.50 per share owned, per year, which tallies out to an annual yield of 0.80%. The five-year average dividend yield is 2.20%.

This ends another exciting episode of the DripAdvisor.com Drip of the Week. Stay tuned next week, as we will spotlight another stock worthy of the DripAdvisor.com limelight.

Editor’s Note:
Please take the time to sign up for a free trial to the DripAdvisor.com Weekly Newsletter. By signing up for the free trial, you are guaranteeing that you will never miss a new hypothetical DRIP recommendation, or the Portfolio Update. Sign up now by clicking on the following link: http://www.psgsecure.com/free/da/

Remember:
Plan your trade, and trade your plan.

Until Next Week,
Nich Sheldon
Editor In Chief
www.dripadvisor.com
questions@DripAdvisor.com

Broker Recommendations

Strong Buy:      10
Buy:              7
Hold:             3
Sell:             1
Strong Sell:      0

Total:           21



Transfer Agent:
Evelyn Angelle
Vice President - Investor Relations 
(p) 713.759.2688
investors@halliburton.com

Corporate Headquarters:
5 Houston Center
1401 Mckinney
Suite 2400
Houston, TX 77010
Phone: 713-759-2600
Fax: 214-978-2611



 
 

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