Sunday, June 28, 2015

Seeking Alpha: Oceaneering Holding Up Better Than Most

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

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