It says a lot about Oceaneering (NYSE:OII)
that the most credible debates about the company concern whether it
will be able to maintain its dividends and share buybacks at the levels
to which investors have become accustomed in recent years. Survival is
not really up for debate with this leading deepwater support company and
neither is an eventual return to growth unless you believe that
offshore development is going to just (somehow) stop.
None of that
should be taken to mean that Oceaneering's operating environment hasn't
become more treacherous, nor that there won't be a serious drop in
profits. Ironically, Oceaneering may actually see free cash flow improve
as it cuts back on capex in an oversupplied market. The quality of this
company is very well appreciated by the Street and it seldom trades at a
big discount to its peers, but I do believe the Oceaneering shares are
undervalued and offer a relatively uncommon buy-and-hold opportunity
within energy. Investors looking to really maximize the bang for their
buck would probably do better with lower-quality companies, but those
ideas carry survival risks that aren't a concern here.
Read more here:
Oceaneering Holding Up Better Than Most
No comments:
Post a Comment