“Of the 494 companies that have reported, 118 have issued guidance for the next quarter–104 of those have been negative, 13 are positive, and only one is in-line. This produces a negative-to-positive (N/P) ratio of 8, tied with fourth quarter of 2013 for the highest N/P ratio in 15 years,” said S&P Capital IQ in a research note.
Oil services spending is also growing, another bullish sign for the sector. Earlier this year, Barclays forecast an industrywide capital spending increase in the U.S. and Canada of 7% following two years of spending growth below 5%. [North America Activity Drives Oil Services ETFs]
There is another favorable catalyst from the oil services group for longer-term investors. While the industry does not yet have the dividend reputation of the integrated oil space, it is worth noting oil services payouts are rising.
Schlumberger’s most recent dividend hike was 29% and the company’s payout is up fourfold over the past decade. Halliburton’s dividend is up 66.7% in less than two years. National Oilwell Varco (NYSE: NOV), OIH’s third-largest holding at 7.3% of the ETF’s weight, earlier this week said it will double its quarterly payout.
Market Vectors Oil Service ETF
