Share repurchases do more than support shares of a company on the open market. They also reflect the company's confidence in its business and cash flows. Oil services companies like Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL), and Baker Hughes (NYSE:BHI) were active in repurchasing their shares in 2013. Recently, all three have outperformed the S&P 500. Will this trend continue in 2014?

Companies will continue to buy back their stock
Back in July 2013, Schlumberger approved a $10 billion share repurchase program which will be completed at the latest by June 30, 2018. However, given the fact that the company spent $1.1 billion on stock repurchases in the fourth quarter alone, this program will be finished way before the announced date.

Halliburton repurchased $4.4 billion worth of shares last year, leaving $1.7 billion for future repurchases; Baker Hughes had $1.65 billion left in its buyback program at the end of 2013.

Oil services companies continue to prefer buyback programs to dividend increases. However, Schlumberger did recently increase its dividend by 28%, bringing the yield to 1.80%. Baker Hughes' and Halliburton's dividends are more modest, with respective yields of 1.00% and 1.10%.

Growth in international markets supports cash flows
Baker Hughes stated that it expects the international rig count to grow by 10% in 2014. First data released this year showed that this prediction is likely to be fulfilled. The latest Baker Hughes International Rig Count revealed that the number of rigs increased by 186, or 3.4%, in January compared to December.

At the same time, the North American rig count was down by seven rigs. This data is also in line with companies' predictions. Schlumberger stated that it expects capital investment levels to grow around 6% in 2014. According to Schlumberger, North American growth will be below this level and international growth will be above this level. What's more, the company stated that North America's land market continued to see downward pricing pressure in most product lines.

Despite the relative weakness in the North American market, these oil service companies were able to demonstrate meaningful revenue growth quarter after quarter in 2013 due to their success in international markets.

The fact that capital expenditures will remain in line with previous year's levels also contributes to free cash flow growth expectations. Schlumberger decided to cut its capital spending from $3.9 billion in 2013 to $3.8 billion in 2014.

Nevertheless, the company stated that it is going to continue to grow while holding spending down due to efficiency improvements. Halliburton's capital budget for 2014 is $3 billion, while Baker Hughes plans $2 billion in capital spending. Both figures are roughly in line with the previous year's numbers and reflect the companies' desire to hold their spending levels.

Bottom line
While I don't expect stellar growth from shares of oil services companies, their positions are solid. The international market continues to grow and outweighs the slowdown and pricing pressure on the domestic front. Companies' cash flows look solid and provide the foundation for existing and future buyback programs. The dividend yields are not spectacular, but there is some room for improvement if the market growth outpaces expectations.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.