Seadrill gets an upgrade at Societe Generale but still disliked

|About: Seadrill Limited (SDRL)|By:, SA News Editor

Societe Generale raises its rating on Seadrill (SDRL -1.7%) to Hold from Sell but the firm still isn't a fan of the offshore driller, and sees better investment opportunities in Noble Corp. (NE -1.2%), Rowan (RDC -1.5%) and Ensco (ESV -0.9%).

The firm believes 2014, 2015 and 2016 consensus might now be a bit too low and that the current $3.92 annual dividend (11% yield) might be secure, but in the event of an unexpected harsher scenario of declining oil prices and/or higher interest rates, it finds little reassurance in SDRL, whose net debt could rise to $17.5B by the end of 2015.

NE, RDC and ESV are the firm's preferred options because they offer only slightly less expected financial rewards for a much lower degree of financial risk.