Contract drilling services provider
Helmerich & Payne Inc.
) has increased its quarterly common stock dividend by more than
100% to 15 cents per share (60 cents per share annualized). The
new dividend will be paid on March 1, 2013 to shareholders of
record as of February 15, 2013.
HELMERICH&PAYNE (HP): Free Stock Analysis
PATTERSON-UTI (PTEN): Free Stock Analysis
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The strength of Helmerich's business model reflects the company's
commitment toward returning value to shareholders with its strong
cash generation capabilities. Helmerich's latest payout hike
marks the 40th dividend increase in as many years.
Helmerich has a strong capital deployment policy through regular
share repurchase and payment of dividends. During fiscal 2012,
the company repurchased shares worth$77.60 million. It has also
paid common stock dividends amounting to $30.0 million in fiscal
We believe that the dividend hike and share repurchase programs
will boost investors' confidence in the stock, thereby driving
Helmerich & Payne is a major land and offshore drilling
contractor in the western hemisphere, having the youngest and
most efficient drilling fleet. The company 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.
However, Helmerich & Payne's results are exposed to oil and
gas prices, which are inherently volatile and subject to complex
market forces. Any significant reduction in energy prices could
depress the level of exploration and production activity,
resulting in a corresponding decline in demand for the company's
Helmerich & Payne currently retains a Zacks #3 Rank
(short-term Hold rating), in line with its rig contractor peer
Patterson-UTI Energy Inc.
). Longer term, we are maintaining our Neutral recommendation on