Checking In With This Red-Hot Oil Stock

HAL is already up over 30% in 2022

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When we last checked in with Halliburton Company (NYSE:HAL), the oil services giant was cooling off from multi-year highs. Now that the post-earnings dust has settled a little over a week later, there's a lot more to unpack with HAL. 

Halliburton stock scored a three-year high of $32.13 on Jan. 27. The shares are now up 37.2% in 2022 already, riding the macro tailwinds wrought from the oil and gas sector revival in the last three months. HAL's 14-Day Relative Strength Index remains in overbought territory, but the company does offers a forward dividend of $0.48 with a dividend yield of 1.56%.

Halliburton has struggled to produce top and bottom line growth in recent years. Between fiscal 2018 and fiscal 2020, HAL's revenues declined 40% and its net income decreased by $4.6 billion. Halliburton's revenues and net income are currently down 36% and 12%, respectively, since fiscal 2018. Nonetheless, Halliburton stock also has a forward price-earnings ratio of 18.52, and the energy company is estimated to grow revenues 12.3% and earnings by a sizable 33.33% in fiscal 2023, potentially giving Halliburton stock more upside as a short-term recovery play despite the long-term risks.

The good news is, options are affordable right now amid a post-earnings volatility crush. This is per HAL's Schaeffer's Volatility Index (SVI) of 41%, which stands in the relatively low 19th percentile of its annual range, meaning options traders' volatility expectations are ice-cold at the moment. Further, the equity's Schaeffer's Volatility Scorecard (SVS) sits at 78 out of 100, suggesting the stock has exceeded options traders' volatility expectations during the past year.

 
 

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