On Feb 5, Zacks Investment Research upgraded Tulsa,
Okla.-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?
Helmerich & Payne's strong revenue, EPS and dividend growth
over the past year, together with its ability to continuously
expand market share, make it a great stock to own.
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 counts
Nabors Industries Ltd.
) as one of its major competitors, specializes in shallow to deep
drilling in oil and gas-producing basins of the U.S. and
In particular, Helmerich & Payne's technologically advanced
FlexRigs are the key to its success. The company's proprietary
design makes them 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.
Another positive in the Helmerich & Payne story is the
quality of its client base, which mostly includes
well-capitalized oil majors or large independents. Finally, with
a low debt equity and payout ratio, the cash-rich company's
dividend payment is expected to be safe and reliable.
Based on its solid fundamentals, low multiples and impressive
dividend growth history, analysts are predicting strong earnings
growth for Helmerich & Payne over 2014 and 2015. The 2014
Zacks Consensus Estimate of $5.93 represents earnings per share
growth of 5% over 2013. The Zacks Consensus Estimate for the next
year is $6.38, corresponding to an 8% growth.
Other Stocks to Consider
Apart from Helmerich & Payne, investors interested in the
energy industry may consider stocks like
Linn Co. LLC
Warren Resources Inc.
). Both these stocks carry a Zacks Rank #1 (Strong Buy).