Going against the broader industry trend, Core Laboratories NV (CLB) announced an increase in its quarterly dividend payment. The oilfield services firm would pay first quarter 2015 cash dividend of 55 cents per share, which is a 10% increase over the previous payout of 50 cents.
On an annualized basis the new dividend will amount to $2.20 per share, yielding 2.1%. The dividend will be paid on Feb 20 to shareholders of record on Jan 23.
The company added that a Dutch withholding tax of 15% would be deducted from the cash dividend.
Amsterdam, Netherlands-based Core Laboratories is an oilfield services company that provides reservoir management and production enhancement services to the oil and gas industry worldwide. The operations of such firms are directly linked to the price of the underlying commodities.
Crude oil price has fallen more than 50% since Jun 2014 owing to a much higher supply of the commodity compared to the global demand. Moreover, oil price is expected to stay low throughout 2015. Since the business of oil field service firms are correlated to the price of crude, we don’t expect Core Laboratories to earn considerable cash flows in the coming months.
Additionally, the company has reduced its fourth-quarter 2014 EPS guidance to the range of $1.53–$1.56.
These factors reflect negatively on the company’s outlook and therefore, Core Laboratories currently holds a Zacks Rank #5 (Strong Sell).
Better-ranked stocks from the energy sector include Exterran Holdings, Inc. (EXH), North American Energy Partners Inc. (NOA) and Transocean Partners LLC (RIGP). While Exterran Holdings sports a Zacks Rank #1 (Strong Buy), North American Energy Partners and Transocean Partners hold a Zacks Rank #2 (Buy).
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