| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 18.60 | 16 |
| Intrinsic value (DCF) | 7.95 | -50 |
| Graham-Dodd Method | 6.20 | -61 |
| Graham Formula | 11.30 | -29 |
NOV Inc. (formerly National Oilwell Varco) is a global leader in designing, manufacturing, and servicing equipment for the oil and gas industry, as well as industrial and renewable energy sectors. Headquartered in Houston, Texas, the company operates through three key segments: Wellbore Technologies, Completion & Production Solutions, and Rig Technologies. With a history dating back to 1862, NOV provides a comprehensive portfolio of drilling, production, and automation solutions, including drill bits, hydraulic fracturing tools, subsea production systems, and offshore wind construction equipment. The company serves a diverse clientele across upstream and midstream energy markets, offering not only cutting-edge technology but also aftermarket services like remote monitoring, repairs, and training. As the energy sector evolves, NOV is positioning itself as a critical enabler of both traditional hydrocarbon extraction and emerging renewable energy infrastructure, making it a pivotal player in the global energy transition.
NOV Inc. presents a mixed investment profile. On the positive side, its diversified portfolio across oilfield services, offshore equipment, and renewable energy infrastructure provides resilience against cyclical downturns in any single segment. The company’s strong market position, long-standing industry relationships, and technological expertise in drilling optimization and automation are key strengths. However, NOV’s financials reflect challenges, including negative operating cash flow (-$179M in FY2022) and high leverage (total debt of $1.72B against cash reserves of $1.07B). The stock’s beta of 1.287 indicates higher volatility, typical for oilfield services firms exposed to commodity price swings. While the dividend yield (based on a $0.30/share payout) offers some income appeal, investors should weigh NOV’s cyclical risks against its role in both traditional and renewable energy markets.
NOV Inc. competes in the highly fragmented oilfield services and equipment sector, where scale, technological innovation, and global service networks are critical. Its competitive advantage lies in its integrated offerings—from drill bits to full rig systems—and its ability to provide end-to-end solutions, including aftermarket services. The company’s Rig Technologies segment, which supplies complex offshore drilling systems, faces stiff competition from Schlumberger (SLB) and Halliburton (HAL), but NOV’s historical expertise in rig equipment gives it an edge in niche markets like deepwater and harsh-environment drilling. In Wellbore Technologies, NOV’s drilling optimization tools compete with Baker Hughes’ (BKR) digital solutions, though NOV’s focus on automation and downhole efficiency differentiates it. The renewable energy segment is nascent but positions NOV against industrial players like Siemens Energy. A key weakness is NOV’s lower profitability compared to peers, likely due to its heavy exposure to capital-intensive rig equipment. Its diversification, however, mitigates reliance on any single market, providing stability during industry downturns.