Halliburton Company (HAL)

[Timothy Smith]

This stock has rebounded off of recent lows, but the shares still look cheap.

It also pays a dividend yield of about 1%, which is not significant, but it could be poised to raise the dividend substantially in the coming years, as the payout ratio is just around 10% of earnings.

This company recently reported strong financial results for the second quarter of 2012. Income from continuing operations came in at $745 million, or 80 cents per diluted share.

This compares favorably with income from continuing operations for the first quarter of 2012, of $635 million, or 69 cents per diluted share. Halliburton shares are trading for just about 10 times forward earnings, which is well below the average of around 13 times for a stock in the S&P 500 Index.

On July 24, 2012, Standpoint Research gave Halliburton shares a buy rating and set a $41 price target. However, other analysts have much higher expectations, including a $56 price target and overweight rating by Barclays.

At current levels, a run to $56 would provide investors with gains of about 55%.

Here are some key points for HAL:

Current share price: $36.03
The 52 week range is $26.28 to $40.43
Earnings estimates for 2012: $3.17 per share
Earnings estimates for 2013: $3.47 per share
Annual dividend: 36 cents per share which yields 1%