- Speculation over a potential dividend cut has helped send Seadrill (SDRL +2.6%) shares down 20% during the past three months, but Morgan Stanley analysts say there's little reason for so much worry.
- Although SDRL has sold off as investors hone in on its high leverage and ability to bridge a large funding gap amid near-term industry headwinds, the firm says it is confident in SDRL's ability to bridge the funding gap through asset backed financing while contract backlog continues to provide near-term cash flow visibility.
- The Stanley analysts see an attractive entry point with SDRL trading at a compelling ~11% yield.
- Other deepwater drillers also are higher: ESV +1%, ATW +1.3%, RDC +1.2%.
at CNBC.com (Nov 18, 2014)