Select Energy Services Stock: Navigating Turbulence with Dividend Consistency

Select Energy Services shares are currently facing significant headwinds following a disappointing quarterly earnings report. The company's steadfast dividend policy provides a rare point of stability for investors during this challenging period, even as ambitious expansion plans within its water services division signal potential for future recovery.

The second quarter of 2025 proved challenging for Select Energy Services, with the company falling short of analyst projections on two critical financial metrics. The earnings report revealed:

• Earnings Per Share: $0.10 actual versus $0.12 expected, representing a 16.7% deficit
• Revenue: $364.22 million actual compared to $367.53 million expected, a 0.9% shortfall

Financial markets responded decisively to the underwhelming results. On the day of the announcement, the stock declined by 3.94% during regular trading hours. The downward momentum continued into pre-market activity the following session, where shares experienced an additional 9.74% drop in value.

Dividend Declaration Offers Silver Lining

Amid the earnings disappointment, Select Energy Services maintained its commitment to shareholder returns. The company recently confirmed a quarterly dividend distribution of $0.07 per share, unchanged from the previous payment. Shareholders of record as of November 7 will receive the dividend payment on November 17. At current trading levels, this distribution translates to a dividend yield of 2.37%.

Should investors sell immediately? Or is it worth buying Select Energy Services?

Diverging Performance Across Business Segments

A detailed examination of the quarterly performance reveals sharply contrasting results between the company's operational divisions. The water infrastructure segment demonstrated robust growth, expanding by 12% and establishing itself as the primary growth driver. Conversely, the chemical technologies business experienced a substantial contraction, with revenues declining by 11%.

Management has articulated clear strategic objectives, targeting 20% annual growth in the water infrastructure division through 2026. To support this expansion, Select Energy Services has allocated substantial capital expenditures between $225 million and $250 million for 2025, with nearly all investment directed toward water network development. This strategic focus could potentially push quarterly revenue in this segment beyond the $100 million threshold by the conclusion of 2026.

Analyst Sentiment Remains Cautious

Market analysts maintain a guarded outlook regarding the stock's near-term prospects. The consensus price target currently stands at $9.50 accompanied by a "Hold" recommendation. Artificial intelligence-driven analysis similarly categorizes the equity as "Neutral." While experts acknowledge the promising potential within the water services business, concerns persist regarding the broader revenue contraction and declining profitability metrics.