Intrinsic value of National Oilwell Varco - NOV

Previous Close

$33.50

  Intrinsic Value

$2.98

stock screener

  Rating & Target

str. sell

-91%

Previous close

$33.50

 
Intrinsic value

$2.98

 
Up/down potential

-91%

 
Rating

str. sell

We calculate the intrinsic value of NOV stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 12.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  19.70
  18.23
  16.91
  15.72
  14.64
  13.68
  12.81
  12.03
  11.33
  10.70
  10.13
  9.61
  9.15
  8.74
  8.36
  8.03
  7.72
  7.45
  7.21
  6.99
  6.79
  6.61
  6.45
  6.30
  6.17
  6.06
  5.95
  5.85
  5.77
  5.69
Revenue, $m
  8,743
  10,337
  12,084
  13,984
  16,031
  18,225
  20,559
  23,033
  25,642
  28,385
  31,259
  34,264
  37,399
  40,667
  44,068
  47,605
  51,282
  55,103
  59,074
  63,201
  67,490
  71,950
  76,589
  81,417
  86,442
  91,677
  97,131
  102,818
  108,750
  114,940
Variable operating expenses, $m
  11,467
  13,383
  15,485
  17,769
  20,231
  22,869
  25,677
  28,651
  31,789
  35,087
  37,590
  41,204
  44,975
  48,904
  52,994
  57,247
  61,669
  66,264
  71,039
  76,002
  81,160
  86,524
  92,103
  97,908
  103,951
  110,246
  116,805
  123,644
  130,777
  138,222
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  11,467
  13,383
  15,485
  17,769
  20,231
  22,869
  25,677
  28,651
  31,789
  35,087
  37,590
  41,204
  44,975
  48,904
  52,994
  57,247
  61,669
  66,264
  71,039
  76,002
  81,160
  86,524
  92,103
  97,908
  103,951
  110,246
  116,805
  123,644
  130,777
  138,222
Operating income, $m
  -2,724
  -3,047
  -3,400
  -3,785
  -4,200
  -4,644
  -5,117
  -5,618
  -6,147
  -6,702
  -6,331
  -6,940
  -7,575
  -8,237
  -8,926
  -9,642
  -10,387
  -11,161
  -11,965
  -12,801
  -13,670
  -14,574
  -15,513
  -16,491
  -17,509
  -18,569
  -19,674
  -20,826
  -22,027
  -23,281
EBITDA, $m
  -1,251
  -1,479
  -1,729
  -2,001
  -2,294
  -2,608
  -2,942
  -3,296
  -3,669
  -4,062
  -4,473
  -4,903
  -5,352
  -5,820
  -6,306
  -6,812
  -7,339
  -7,885
  -8,454
  -9,044
  -9,658
  -10,296
  -10,960
  -11,651
  -12,370
  -13,119
  -13,900
  -14,714
  -15,562
  -16,448
Interest expense (income), $m
  101
  146
  211
  283
  362
  448
  541
  640
  745
  857
  975
  1,099
  1,228
  1,364
  1,506
  1,653
  1,807
  1,967
  2,133
  2,306
  2,485
  2,671
  2,865
  3,067
  3,276
  3,494
  3,721
  3,958
  4,204
  4,461
  4,729
Earnings before tax, $m
  -2,870
  -3,258
  -3,684
  -4,147
  -4,648
  -5,185
  -5,757
  -6,363
  -7,004
  -7,677
  -7,430
  -8,169
  -8,940
  -9,743
  -10,579
  -11,450
  -12,354
  -13,294
  -14,271
  -15,286
  -16,342
  -17,439
  -18,580
  -19,767
  -21,003
  -22,291
  -23,632
  -25,030
  -26,489
  -28,010
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -2,870
  -3,258
  -3,684
  -4,147
  -4,648
  -5,185
  -5,757
  -6,363
  -7,004
  -7,677
  -7,430
  -8,169
  -8,940
  -9,743
  -10,579
  -11,450
  -12,354
  -13,294
  -14,271
  -15,286
  -16,342
  -17,439
  -18,580
  -19,767
  -21,003
  -22,291
  -23,632
  -25,030
  -26,489
  -28,010

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  24,219
  28,634
  33,475
  38,736
  44,408
  50,483
  56,952
  63,803
  71,031
  78,628
  86,589
  94,913
  103,599
  112,650
  122,071
  131,869
  142,055
  152,640
  163,640
  175,071
  186,954
  199,308
  212,159
  225,531
  239,452
  253,952
  269,061
  284,814
  301,246
  318,394
Adjusted assets (=assets-cash), $m
  24,219
  28,634
  33,475
  38,736
  44,408
  50,483
  56,952
  63,803
  71,031
  78,628
  86,589
  94,913
  103,599
  112,650
  122,071
  131,869
  142,055
  152,640
  163,640
  175,071
  186,954
  199,308
  212,159
  225,531
  239,452
  253,952
  269,061
  284,814
  301,246
  318,394
Revenue / Adjusted assets
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
Average production assets, $m
  9,407
  11,122
  13,003
  15,046
  17,250
  19,610
  22,122
  24,784
  27,591
  30,542
  33,634
  36,868
  40,242
  43,757
  47,417
  51,223
  55,179
  59,291
  63,564
  68,004
  72,619
  77,419
  82,410
  87,604
  93,012
  98,644
  104,513
  110,632
  117,015
  123,676
Working capital, $m
  4,109
  4,858
  5,680
  6,572
  7,535
  8,566
  9,663
  10,826
  12,052
  13,341
  14,692
  16,104
  17,578
  19,113
  20,712
  22,374
  24,102
  25,898
  27,765
  29,704
  31,720
  33,817
  35,997
  38,266
  40,628
  43,088
  45,652
  48,324
  51,112
  54,022
Total debt, $m
  3,914
  5,247
  6,709
  8,298
  10,011
  11,846
  13,799
  15,869
  18,051
  20,346
  22,750
  25,264
  27,887
  30,620
  33,465
  36,424
  39,500
  42,697
  46,019
  49,471
  53,060
  56,791
  60,672
  64,710
  68,915
  73,293
  77,856
  82,614
  87,576
  92,755
Total liabilities, $m
  7,314
  8,647
  10,109
  11,698
  13,411
  15,246
  17,199
  19,269
  21,451
  23,746
  26,150
  28,664
  31,287
  34,020
  36,865
  39,824
  42,900
  46,097
  49,419
  52,871
  56,460
  60,191
  64,072
  68,110
  72,315
  76,693
  81,256
  86,014
  90,976
  96,155
Total equity, $m
  16,905
  19,986
  23,365
  27,037
  30,997
  35,237
  39,752
  44,535
  49,580
  54,882
  60,439
  66,249
  72,312
  78,630
  85,206
  92,045
  99,154
  106,543
  114,221
  122,200
  130,494
  139,117
  148,087
  157,421
  167,138
  177,258
  187,805
  198,800
  210,270
  222,239
Total liabilities and equity, $m
  24,219
  28,633
  33,474
  38,735
  44,408
  50,483
  56,951
  63,804
  71,031
  78,628
  86,589
  94,913
  103,599
  112,650
  122,071
  131,869
  142,054
  152,640
  163,640
  175,071
  186,954
  199,308
  212,159
  225,531
  239,453
  253,951
  269,061
  284,814
  301,246
  318,394
Debt-to-equity ratio
  0.230
  0.260
  0.290
  0.310
  0.320
  0.340
  0.350
  0.360
  0.360
  0.370
  0.380
  0.380
  0.390
  0.390
  0.390
  0.400
  0.400
  0.400
  0.400
  0.400
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.420
  0.420
  0.420
Adjusted equity ratio
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698
  0.698

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2,870
  -3,258
  -3,684
  -4,147
  -4,648
  -5,185
  -5,757
  -6,363
  -7,004
  -7,677
  -7,430
  -8,169
  -8,940
  -9,743
  -10,579
  -11,450
  -12,354
  -13,294
  -14,271
  -15,286
  -16,342
  -17,439
  -18,580
  -19,767
  -21,003
  -22,291
  -23,632
  -25,030
  -26,489
  -28,010
Depreciation, amort., depletion, $m
  1,473
  1,567
  1,671
  1,784
  1,906
  2,036
  2,175
  2,322
  2,477
  2,640
  1,858
  2,037
  2,223
  2,418
  2,620
  2,830
  3,049
  3,276
  3,512
  3,757
  4,012
  4,277
  4,553
  4,840
  5,139
  5,450
  5,774
  6,112
  6,465
  6,833
Funds from operations, $m
  -1,398
  -1,691
  -2,013
  -2,363
  -2,742
  -3,149
  -3,582
  -4,041
  -4,526
  -5,037
  -5,572
  -6,132
  -6,716
  -7,325
  -7,960
  -8,620
  -9,306
  -10,018
  -10,759
  -11,529
  -12,330
  -13,162
  -14,027
  -14,927
  -15,865
  -16,841
  -17,858
  -18,918
  -20,024
  -21,177
Change in working capital, $m
  676
  749
  821
  893
  962
  1,031
  1,097
  1,163
  1,226
  1,289
  1,351
  1,412
  1,474
  1,536
  1,598
  1,662
  1,728
  1,796
  1,866
  1,940
  2,016
  2,096
  2,180
  2,269
  2,362
  2,460
  2,564
  2,673
  2,788
  2,910
Cash from operations, $m
  -2,074
  -2,440
  -2,834
  -3,256
  -3,705
  -4,179
  -4,679
  -5,204
  -5,753
  -6,326
  -6,923
  -7,544
  -8,190
  -8,861
  -9,558
  -10,282
  -11,034
  -11,814
  -12,626
  -13,469
  -14,346
  -15,258
  -16,207
  -17,196
  -18,227
  -19,301
  -20,421
  -21,591
  -22,812
  -24,087
Maintenance CAPEX, $m
  -434
  -520
  -614
  -718
  -831
  -953
  -1,083
  -1,222
  -1,369
  -1,524
  -1,687
  -1,858
  -2,037
  -2,223
  -2,418
  -2,620
  -2,830
  -3,049
  -3,276
  -3,512
  -3,757
  -4,012
  -4,277
  -4,553
  -4,840
  -5,139
  -5,450
  -5,774
  -6,112
  -6,465
New CAPEX, $m
  -1,550
  -1,715
  -1,880
  -2,044
  -2,203
  -2,360
  -2,512
  -2,661
  -2,807
  -2,951
  -3,093
  -3,233
  -3,374
  -3,516
  -3,659
  -3,806
  -3,956
  -4,112
  -4,273
  -4,440
  -4,616
  -4,799
  -4,992
  -5,194
  -5,407
  -5,632
  -5,869
  -6,119
  -6,383
  -6,661
Cash from investing activities, $m
  -1,984
  -2,235
  -2,494
  -2,762
  -3,034
  -3,313
  -3,595
  -3,883
  -4,176
  -4,475
  -4,780
  -5,091
  -5,411
  -5,739
  -6,077
  -6,426
  -6,786
  -7,161
  -7,549
  -7,952
  -8,373
  -8,811
  -9,269
  -9,747
  -10,247
  -10,771
  -11,319
  -11,893
  -12,495
  -13,126
Free cash flow, $m
  -4,058
  -4,674
  -5,329
  -6,018
  -6,740
  -7,492
  -8,275
  -9,088
  -9,929
  -10,801
  -11,703
  -12,636
  -13,601
  -14,600
  -15,635
  -16,708
  -17,820
  -18,975
  -20,174
  -21,421
  -22,718
  -24,069
  -25,476
  -26,943
  -28,474
  -30,072
  -31,740
  -33,484
  -35,307
  -37,213
Issuance/(repayment) of debt, $m
  1,202
  1,333
  1,462
  1,589
  1,713
  1,835
  1,953
  2,069
  2,183
  2,294
  2,404
  2,514
  2,623
  2,733
  2,845
  2,959
  3,076
  3,197
  3,322
  3,452
  3,588
  3,731
  3,881
  4,038
  4,204
  4,379
  4,563
  4,757
  4,962
  5,179
Issuance/(repurchase) of shares, $m
  5,681
  6,340
  7,063
  7,820
  8,608
  9,425
  10,272
  11,146
  12,048
  12,979
  12,987
  13,979
  15,002
  16,061
  17,155
  18,289
  19,464
  20,683
  21,949
  23,266
  24,636
  26,062
  27,550
  29,101
  30,720
  32,411
  34,178
  36,026
  37,958
  39,980
Cash from financing (excl. dividends), $m  
  6,883
  7,673
  8,525
  9,409
  10,321
  11,260
  12,225
  13,215
  14,231
  15,273
  15,391
  16,493
  17,625
  18,794
  20,000
  21,248
  22,540
  23,880
  25,271
  26,718
  28,224
  29,793
  31,431
  33,139
  34,924
  36,790
  38,741
  40,783
  42,920
  45,159
Total cash flow (excl. dividends), $m
  2,825
  2,999
  3,196
  3,390
  3,581
  3,768
  3,950
  4,128
  4,302
  4,473
  3,689
  3,857
  4,025
  4,194
  4,365
  4,540
  4,719
  4,905
  5,097
  5,297
  5,506
  5,725
  5,954
  6,196
  6,450
  6,718
  7,001
  7,299
  7,614
  7,946
Retained Cash Flow (-), $m
  -5,681
  -6,340
  -7,063
  -7,820
  -8,608
  -9,425
  -10,272
  -11,146
  -12,048
  -12,979
  -12,987
  -13,979
  -15,002
  -16,061
  -17,155
  -18,289
  -19,464
  -20,683
  -21,949
  -23,266
  -24,636
  -26,062
  -27,550
  -29,101
  -30,720
  -32,411
  -34,178
  -36,026
  -37,958
  -39,980
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -2,856
  -3,341
  -3,867
  -4,429
  -5,026
  -5,658
  -6,322
  -7,018
  -7,747
  -8,507
  -9,298
  -10,122
  -10,978
  -11,867
  -12,790
  -13,749
  -14,744
  -15,778
  -16,852
  -17,969
  -19,130
  -20,338
  -21,595
  -22,905
  -24,270
  -25,693
  -27,177
  -28,726
  -30,344
  -32,034
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -2,738
  -3,059
  -3,365
  -3,647
  -3,896
  -4,106
  -4,271
  -4,387
  -4,450
  -4,460
  -4,416
  -4,319
  -4,174
  -3,984
  -3,755
  -3,494
  -3,208
  -2,906
  -2,595
  -2,283
  -1,979
  -1,688
  -1,415
  -1,167
  -944
  -750
  -583
  -444
  -331
  -241
Current shareholders' claim on cash, %
  69.3
  49.1
  35.3
  25.8
  19.1
  14.3
  10.9
  8.3
  6.4
  5.0
  3.9
  3.1
  2.5
  2.0
  1.6
  1.3
  1.1
  0.9
  0.7
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1

National Oilwell Varco, Inc. is an oilfield equipment manufacturer and technology provider. The Company operates through four segments: Rig Systems, Rig Aftermarket, Wellbore Technologies and Completion & Production Solutions. The Rig Systems segment makes and supports the capital equipment and integrated systems needed to drill oil and gas wells on land and offshore. The Rig Systems segment designs, manufactures and sells land rigs, offshore drilling equipment packages, and drilling rig components. The Rig Aftermarket segment provides aftermarket products and services to support a large installed base of land and offshore rigs, and drilling rig components manufactured by the Company's Rig Systems segment. The Wellbore Technologies segment designs, manufactures, rents and sells a range of equipment and technologies used to perform drilling operations. The Completion & Production Solutions segment integrates technologies for well completions and oil and gas production.

FINANCIAL RATIOS  of  National Oilwell Varco (NOV)

Valuation Ratios
P/E Ratio -5.3
Price to Sales 1.7
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 13.2
Price to Free Cash Flow 18.8
Growth Rates
Sales Growth Rate -50.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -37.3%
Cap. Spend. - 3 Yr. Gr. Rate -14.3%
Financial Strength
Quick Ratio 3
Current Ratio 0.2
LT Debt to Equity 19.4%
Total Debt to Equity 23.1%
Interest Coverage -25
Management Effectiveness
Return On Assets -9.8%
Ret/ On Assets - 3 Yr. Avg. -1.5%
Return On Total Capital -12.9%
Ret/ On T. Cap. - 3 Yr. Avg. -2.1%
Return On Equity -15.9%
Return On Equity - 3 Yr. Avg. -2.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin -1.4%
Gross Margin - 3 Yr. Avg. 15.5%
EBITDA Margin -25.1%
EBITDA Margin - 3 Yr. Avg. -1%
Operating Margin -33.3%
Oper. Margin - 3 Yr. Avg. -6.3%
Pre-Tax Margin -36.2%
Pre-Tax Margin - 3 Yr. Avg. -8%
Net Profit Margin -33.3%
Net Profit Margin - 3 Yr. Avg. -8.9%
Effective Tax Rate 7.9%
Eff/ Tax Rate - 3 Yr. Avg. 2.5%
Payout Ratio -9.5%

NOV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NOV stock intrinsic value calculation we used $7304 million for the last fiscal year's total revenue generated by National Oilwell Varco. The default revenue input number comes from 0001 income statement of National Oilwell Varco. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NOV stock valuation model: a) initial revenue growth rate of 19.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for NOV is calculated based on our internal credit rating of National Oilwell Varco, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of National Oilwell Varco.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NOV stock the variable cost ratio is equal to 133.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NOV stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for National Oilwell Varco.

Corporate tax rate of 27% is the nominal tax rate for National Oilwell Varco. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NOV stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NOV are equal to 107.6%.

Life of production assets of 18.1 years is the average useful life of capital assets used in National Oilwell Varco operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NOV is equal to 47%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $14094 million for National Oilwell Varco - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 382.619 million for National Oilwell Varco is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of National Oilwell Varco at the current share price and the inputted number of shares is $12.8 billion.

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COMPANY NEWS

▶ National Oilwell Varco Declares Regular Quarterly Dividend   [Nov-13-18 06:00PM  Business Wire]
▶ National Oilwell Varco: 3Q Earnings Snapshot   [07:17PM  Associated Press]
▶ National Oilwell Varco to Host 2018 Analyst Day   [Oct-19-18 05:00PM  Business Wire]
▶ Will Dril-Quip Stock Continue to Range Trade Into Earnings?   [Oct-09-18 08:28AM  InvestorPlace]
▶ Stocks - Twitter Jumps Midday; Energy Stocks Gain   [Aug-21-18 02:33PM  Investing.com]
▶ National Oilwell Varco Declares Regular Quarterly Dividend   [Aug-16-18 06:30AM  Business Wire]
▶ NASDAQ, S&P Within 1% of New Highs   [Aug-08-18 09:15AM  Zacks]
▶ National Oilwell Varco Reports Second Quarter 2018 Earnings   [Jul-26-18 06:00PM  Business Wire]
▶ [$$] Look Who's Buying Verizon and JPMorgan   [Jul-13-18 07:30AM  Barrons.com]
▶ The 5 Best Energy Stocks of 2018 (So Far)   [Jul-07-18 10:19AM  Motley Fool]
▶ NOV, Saudi Aramco form JV to provide drilling equipment, create education center   [Jun-29-18 01:19PM  American City Business Journals]
▶ National Oilwell Varco Q2 Earnings Preview   [Jun-26-18 07:46AM  Benzinga]
▶ [$$] CapStreet Group Appoints Principal   [Jun-04-18 12:29PM  The Wall Street Journal]
▶ 3 Top Oil Stocks to Buy Right Now   [Jun-03-18 06:16AM  Motley Fool]
▶ Closing Bell Exchange: Markets react to Fed minutes   [May-23-18 03:49PM  CNBC Videos]
▶ Two ways to play oil stocks while limiting your risk   [May-16-18 07:18AM  MarketWatch]
▶ Two ways to play oil stocks while limiting your risk   [May-15-18 12:32PM  MarketWatch]
▶ National Oilwell Varco Declares Regular Quarterly Dividend   [May-11-18 05:00PM  Business Wire]
▶ TD Ameritrade Investor Movement Index Down Again in April   [May-08-18 02:08PM  Investopedia]
▶ National Oilwell Varco, Inc. Took a Step Back in Q1   [Apr-27-18 03:44PM  Motley Fool]
▶ National Oilwell Varco: 1Q Earnings Snapshot   [05:07AM  Associated Press]
▶ National Oilwell Varco Reports First Quarter 2018 Results   [Apr-26-18 07:50PM  Business Wire]
▶ 5 Likely Winners Of The Next Oil Boom   [Apr-18-18 07:30PM  Oilprice.com]
▶ OTC 2018: Tech awards doled out before big conference hits Houston   [Mar-22-18 03:21PM  American City Business Journals]
▶ National Oilwell Varco Declares Regular Quarterly Dividend   [Feb-23-18 06:00PM  Business Wire]
▶ Drilling products company anticipates Houston job cuts due to NOV acquisition   [Feb-21-18 09:10AM  American City Business Journals]
▶ Stock Market News For Feb 6, 2018   [Feb-06-18 10:15AM  Zacks]
▶ National Oilwell Varco reports 4Q loss   [05:03AM  Associated Press]

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