Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

National Oilwell Varco - Offers Growth & Dividends

|Includes: National Oilwell Varco, Inc. (NOV)

Not your typical Dividend Growth holding, National Oilwell Varco is an investment in growth with rising dividends as a bonus. Similar to my investment in Boeing, I view NOV as well positioned for a prolonged earnings growth cycle, which is just in its infancy stage.

CORPORATE PROFILE: "National Oilwell Varco is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production, the provision of oilfield inspection and other services, and supply chain integration services to the upstream oil and gas industry." (Source….. NOV's web site)

Classic pick & shovel company offering 1-stop shopping for drilling & exploration of oil & natural gas, be it on land or deep sea. During the California Gold Rush the most prosperous businesses were more often than not the merchants that sold the prospectors the picks & shovels. Regardless if it involves tar sands, fracking, offshore or horizontal drilling NOV with more than 4-dozen acquisitions the past two years offers every piece of equipment & service imaginable to the industry it feeds. According to Wikinvest the NOV brands can be found on 90% of the oilrigs around the globe.

POSITIVES: Have beaten the annual EPS estimates in 2011 & 2012. (Though they missed some interim quarterlies along the way.) As of April enjoyed a record backlog of $12.92 billion. In past 24 months they completed an astounding 51 acquisitions to bolster their portfolio of equipment & services. When offshore oilrigs are due for their 5-year scheduled maintenance, these are $40 to $50 million tune-ups, which NOV will be competing for from a position of strength, as their name brand is throughout the equipment. Hundreds of those rigs are coming up to their 5-year service dates over the next few years, which should add to the backlog in business.

Warren Buffet came onboard National Oilwell Varco in late 2012, and has nearly doubled his position in the first quarter of 2013, to about 7.5 million shares. I prefer to invest alongside The Oracle, where & when it makes economical sense to me. Aligning my own long-term investments with the most successful investor in the history of the world offers me favorable risk/reward opportunity.

RISKS: NOV carries a volatile stock price that tends to swing with the price of oil in general, and certainly with the Oil Services Index. (Of course this provides the patient long-term investor with more affordable entry opportunities.) While it is an industry leader, (reportedly 60% market share, according to Motley Fool), like all highly profitable businesses there are wolves at the doorstep, and no shortage of competition. Schlumberger, Halliburton, Baker Hughes & Cameron International lead the pack, and there are dozens more. The super aggressive acquisition strategy the past few years invariably will encounter assimilation challenges that don't always go according to plan.

VIEW FROM F.A.S.T. Graphs™ : Current stock price is below both its earnings growth and traditional P/E, that it offers some margin of safety. The acquisition mania the past few years stalled the earnings and flattened the earnings growth temporarily, opening the opportunity to buy what certainly appears to be a wonderful company at a fair price.

DIVIDENDS: In May NOV announced a 100% boost to its quarterly dividend, from $0.13 to $0.26. Albeit an anemic 1.48% yield currently, it's their 5th straight year of increases and ten-fold increase from when they began paying dividends in 2009. The trend is your friend, and it continues to head North, which is what Dividend Growth is all about.

Disclosure: Long NOV

Always perform your own due diligence and respect that my enthusiasm for a Dividend Growth investment may not be suitable to your portfolio.

Disclosure: I am long NOV.