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Investors seeking stable high yield have faced a challenging environment over the last few years as the Federal Reserve continues to engineer a low interest rate environment. However, nimble investors have managed to cobble together a solid high yield portfolio by looking in non-traditional sectors for yield plays. One high yielding oil services firm that looks like it is gaining momentum is Seadrill (SDRL)

Key recent catalysts for Seadrill:

  • Deutsche Bank just initiated the shares as a "buy" based on the quality and diversification of its assets.
  • Its recent acquisition of Asia Offshore Drilling should be positive for revenue growth and shareholders.
  • TheStreet upgraded the shares to "Buy" from "Hold" in late October.
  • It successfully IPO'd a subsidiary, Seadrill Partners LLC (SDLP) and will retain almost 80% stake in the company that was just initiated as a "Buy" at Citigroup with a $30 price target, more than 25% above its current price.

Seadrill Limited provides offshore drilling services to the oil and gas industry worldwide. Its services include drilling, completion, and maintenance of offshore wells; production drilling and well maintenance; and well services.

4 additional reasons SDRL is a good value and income play at under $39 a share:

  1. The stock yields over 8% and has raised its dividend payouts by approximately a third since 2010.
  2. The 13 analysts that cover the stock have a $46 price target on the stock, very decent upside given its robust yield.
  3. Revenue growth is projected to accelerate to near 15% next year from around 6% this fiscal year. The stock has ridiculously low five year projected PEG (.42) for such a high yielder.
  4. SDRL is selling at just 11x forward earnings and around 9x operating cash flow.
Source: Cheap 8% Yielder Is Picking Up Positive Catalysts