With many major stock market indices down year to date, some investors are scrambling to find a safe harbor for their hard-earned savings. One place they are turning to is the energy sector.

Energy has massively outperformed formerly hot sectors like tech, as market participants have gobbled up value stocks and ditched growth stocks. One such name is Schlumberger (SLB -0.89%), an oil and gas services giant that just boosted its quarterly dividend by 40%.

Oil and gas worker wearing a hardhat inspects equipment.

Image source: Getty Images.

Schlumberger's first dividend hike in seven years is a good sign

Schlumberger reported first-quarter earnings results on April 22. The company reported solid results. Revenue grew 14% year over year to $6 billion. Adjusted earnings per share were $0.34, up 62% from a year earlier. Moreover, management had a pleasant surprise for shareholders -- a dividend hike. 

SLB Dividend Chart

SLB Dividend data by YCharts

Schlumberger increased its quarterly dividend from $0.125 per share to $0.17, starting with its July payment. This hike brings Schlumberger's dividend yield (annual dividend payment/share price) to 1.79%. It's a far cry from the $0.50 per share quarterly dividend the company was paying back in 2019, but still a welcome development.

Margins remain at the highest levels in years

Schlumberger's first-quarter results were good but not spectacular. During its earnings call, management pointed out two significant headwinds that held back its performance: 

  1. The war in Ukraine
  2. Supply chain shortages

The war, along with new sanctions on Russia and the collapse of the Russian ruble, was one drag on Schlumberger's results. The company has announced it is halting any new technology or investment deployments to Russia. The second big headwind was supply chain shortages. Like many businesses, Schlumberger noted delays in component delivery or that delivery costs rose during the first quarter. Despite these headwinds, Schlumberger still maintained its EBIT (earnings before interest and taxes) margin of 13.3%.

SLB EBIT Margin (TTM) Chart

SLB EBIT Margin (TTM) data by YCharts

Is Schlumberger a buy now?

Despite these headwinds, management remains confident that 2022 will prove to be a good year. The company reported 14% overall revenue growth, with all four segments growing year over year. Moreover, first-quarter operating margins were the highest for the company since 2015.

More broadly, management still sees the larger macroeconomic environment as favorable. Energy demand remains tight, and Schlumberger sees a larger and longer cycle of energy industry investment in the coming years. As the best-of-breed oil service stock, that's good news for Schlumberger. Add in the increased dividend, and the stock still looks like a buy today.