re: Seadrill (SDRL) has a yield of 0%.

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When it comes to Seadrill, investors mostly focus on its extreme dividend yield, or its leveraged profile compared to peers. As a result, investors seem to think that an impending dividend cut and Seadrill's comparatively high levels of leverage are the reasons why its shares have performed so poorly lately.

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A look at the performance of Seadrill's peers, however, shows that investors are not only critical with respect to Seadrill, which makes it unlikely that leverage and dividend concerns are the only drivers of the recent value destruction: All offshore companies are down sharply over the course of this year.

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Downturns in the offshore drilling business come and go, just like in any other business, so investors really need to keep a sense of proportion here.

Seadrill is one of the largest offshore drillers in the business, if any company has the ability to withstand a short-term downturn and refinance debt, it should be Seadrill.

Further, Seadrill has working and contract relationships with the largest companies in the energy sector: From ExxonMobil (NYSE:XOM) to Chevron (NYSE:CVX) and Hess (NYSE:HES), all major energy firms can be counted among Seadrill's clients. More importantly, Seadrill continues to benefit from a massive build-up of work that needs to done.

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With falling oil prices, drilling becomes less attractive. Higher oil prices, on the other hand, often lead to a gold rush mentality, that can cause a serious increase in drilling activity. As logical as this is, it is also important to realize that a business, especially one of the size of Seadrill, can't be run based on where oil prices are heading on any given day or week. Seadrill is in the business for the long haul, and investors should be, too.

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Bottom Line
Seadrill remains a hotly debated stock, and discussions usually center around three themes, which are all very well known and understood: Sector slowdown, high leverage, and an impending dividend cut.

But how about taking a step back and realizing that Seadrill is well positioned to withstand softer short term growth. Oil prices also won't stay low forever. As soon as oil prices turn, I would bet sentiment towards the offshore driller changes about as quickly as it went south over the last three months.

If investors have an investment horizon of only two or three months, I understand the unsettling debate over the three themes mentioned above. Long-term investors, though, should carefully take into consideration Seadrill's superior fleet profile, large size, fantastic order backlog, and good standing among customers. All other problems are solvable. Long-term Buy.

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not in south la

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quote: As a blanket statement, cheap energy is GREAT for an economy.

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