The Razor's Edge

2-Year Price History

Ockham's Rating

Rating Specific Information Withheld Premium Access Only

NBL Revenue

As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, NBL the high and low end of the Price to Sales per share ratios are 3.41x and 2.04x respectively.

Notice that NBL's current Price to Sales per share ratio is 1.98x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $52.38, NBL is 28% below where we would expect to see it. This will beneficially factor into our final analysis of NBL as it is not often that this stock sinks to these levels.

NBL Cash Earnings

As the old saying goes, "Cash is King!" However, we prefer to capture a few other items within our analysis to identify "cash earnings". Nevertheless, an analysis of Cash Earnings is absolutely pivotal to assessing a company's value, and currently NBL is significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for NBL, the current level of Cash Earnings compared to its historical levels helps identify where NBL is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 6.83 and a historical low Cash Earnings per share ratio of 4.10, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for NBL? From the Ockham perspective, we are looking specifically at NBL to see if the market is recognizing the huge disparity between NBL's past stock price to Cash Earnings ratio to today's levels. At a difference of 42% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at NBL. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

NBL Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for NBL to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for NBL is $0.72 producing a current dividend yield of 1.37%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from NBL against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from NBL over previous years was 2.33% while the lowest dividend yield was 0.31%. Management at NBL has encouraged us with a current dividend yield of 3.79% above the historical median.