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
[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’
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
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.
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Until Next Week,
Editor In Chief
Strong Buy: 10
Strong Sell: 0
Vice President - Investor Relations
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Houston, TX 77010