On Nov 22, Zacks Investment Research upgraded Tulsa, OK-based
contract drilling services provider
Helmerich & Payne Inc.
) to a Zacks Rank #1 (Strong Buy).
HELMERICH&PAYNE (HP): Free Stock Analysis
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Why the Upgrade?
We remain optimistic about the firm's near-term prospects,
supported by its superior and diversified drilling fleet,
continued strong operating performance led by an efficient
management team, and an investor-friendly financial policy.
Helmerich & Payne is a major land and offshore drilling
contractor in the western hemisphere, having the youngest and
most efficient drilling fleet. The company, which has surpassed
earnings estimates in each of the last 6 quarters, specializes in
shallow to deep drilling in oil and gas-producing basins of the
U.S. and in drilling for oil and gas in international locations.
We believe that Helmerich & Payne's technologically-advanced
FlexRigs are the key to its success, helping to increase its
count of active rigs and maintain relatively strong daily-rate
margins even during times of market uncertainty. The company's
proprietary FlexRig design makes the rigs move faster than
conventional rigs, drill quicker and more efficiently, and allows
for a safer operating environment. As such, these are better
suited for the new demands of the exploration business and,
therefore, command higher dayrates and utilization than rigs from
other land drillers.
Helmerich & Payne - which counts
Nabors Industries Ltd.
) as one of its major competitors - recently approved a raise in
its quarterly cash dividend to 50 cents per share ($2.00 per
share annualized), representing an increase of more than 200%
over the previous payout. The significant dividend hike not only
highlights the company's commitment to create value for
shareholders but also underlines Helmerich & Payne's strong
cash generation capabilities.
Another positive in the Helmerich & Payne story is the
quality of its client base, which mostly includes
well-capitalized oil majors or large independents.
Other Stocks to Consider
Some other stocks worth considering in the 'Oil & Gas
Drilling' sector include
). While Tesco holds a Zacks Rank #1 (Strong Buy), Transocean
carries a Zacks Rank #2 (Buy).