3 of 6
BACK NEXT
National Oilwell Varco
National Oilwell Varco
Debt as a % of capital: 9%
Return on capital: 24%

In the era of $125 a barrel crude oil, many companies in the oil patch are flush with cash.

Last year, National Oilwell Varco's profits nearly doubled to $1.3 billion and the Houston-based oil and gas driller was the best performer in the S&P 500, up 128 percent.

National Oilwell Varco has a history of healthy cash flows. Phillip Dodge, an oil industry analyst at Stanford Group Co., called the company a "capital generating machine."

"National Oilwell Varco has built up cash rapidly over the past several years," he said. However, he cautions that "things will look a lot tighter in July" since that's when National Oilwell Varco reports its second quarter results.

These numbers will reflect the $7.5 billion acquisition of drill bit maker Grant Prideco, completed in April. Still, given the company's track record, Dodge thinks it won't be long before it builds up its cash again

One big reason is because National Oilwell Varco has a close relationship with Russian oil giant Gazprom, which gives it access to a "very rapidly growing market." That's especially true in light of a large natural gas discovery made recently near the Bering Sea.

Furthermore, as the price of crude climbs, certain reserves in North America that were not cost effective to drill in before are becoming more viable. That should lead to higher demand for the company's services.

NEXT: Big Lots

Last updated June 20 2008: 1:08 PM ET
More Galleries
10 most expensive cars sold at Pebble Beach These multi-million-dollar cars sold for top dollar at this year's Pebble Beach collector car auctions. More
The world's most popular beer is ... Few people outside China have ever tasted the top-selling brew in the world. More
Transformations on the street On his days off, stylist Mark Bustos gives free haircuts to the homeless. Here are some of the transformations. More

Special Offer
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.