Global large-cap energy equipment maker
National Oilwell Varco Inc.
) has increased its quarterly common stock dividend by a penny to
13 cents per share. The new dividend will be paid on December 21,
2012 to shareholders of record as of December 7.
The strength of National Oilwell's business model reflects the
company's commitment toward returning value to shareholders with
its strong cash generation capabilities. Prior to this revision,
the company had increased its quarterly dividend by a penny in
As on September 30, 2012, the company had $1,702.0 million in
cash and a debt of $1,529.0 million. The debt-to-capitalization
ratio stood at approximately 7.2%.
Moreover, it has paid common stock dividends amounting to $153.0
million to shareholders up to third quarter of 2012.
We believe that the increase in dividend will boost investor
confidence in the stock, thereby driving share value.
Houston, Texas-based National Oilwell Varco, Inc., formerly
National Oilwell, is a world leader in the design, manufacture,
and sale of comprehensive systems, components, products, and
equipment used in oil and gas drilling and production worldwide.
The company is one of the biggest manufacturers of drilling
equipment in the world with an impressive business model. The
company's large installed base of rigs worldwide provides for a
steady recurring revenue stream through demand for maintenance,
parts and other expendable products
However, National Oilwell Varco conducts operations in many
countries, with a major portion of its total revenue coming from
international markets. As such, the company is exposed to risks
associated with doing business abroad. Such risks include
embargoes and/or expropriation of assets, exchange rate risks,
terrorism and political/civil sentiment, and others.
National Oilwell Varco, which ranks ahead of
Cameron International Corp.
) as the biggest U.S. maker of oilfield equipment, is currently a
Zacks #3 Rank (Hold) stock, implying that it is expected to
perform in line with the broader U.S. equity market over the next
one to three months. We are also maintaining our long-term
Neutral recommendation on the stock
CAMERON INTL (CAM): Free Stock Analysis
NATL OILWELL VR (NOV): Free Stock Analysis
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