On Feb 22, Zacks Investment Research upgraded Houston,
Texas-based onshore contract driller
Patterson-UTI Energy Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Patterson-UTI had a good 2013, beating the Zacks Consensus
Estimate in three out of four quarters, with the most recent
quarter reporting a 27% positive surprise. Investors are also
bullish on the company based on its dividend story and share
On Feb 6, Patterson-UTI reported fourth earnings of 28 cents per
share, much above the Zacks Consensus Estimate of 22 cents amid
an increase in rig revenues. Reported revenues for the quarter
surpassed both the Zacks Consensus Estimate as well the year-ago
Additionally, Patterson-UTI approved a quarterly cash dividend of
10 cents per share, representing a sequential hike of 100.0%. The
announcements had a positive impact on investors as the stock
price shot up 13.4% to $27.87 on Feb 6.
The bullishness does not end there. The momentum carried the
stock further up, over 9% since the reported earnings, to reach
$30.40 on Feb 24. The intraday high of $30.67 also marked the new
52-week high for the company.
Patterson-UTI's growing premium land rig fleet and the expected
demand uptick for such services also works in its favor. The
company's new rigs and efficient equipment should give
Patterson-UTI Energy an edge over competitors and help it weather
the current volatile environment better than some of its peers.
We expect this growth to continue for Patterson-UTI. In the past
30 days, there have been 9 upward revisions in the current
quarter estimates, increasing the consensus from 23 cents to 29
cents. The 11 upward estimate revisions for the current year has
resulted in an increase in the consensus estimate from $1.12 per
share to $1.32.
Other Stocks to Consider
Some other stocks worth considering in the oil and gas
drilling sector include
Helmerich & Payne, Inc.
New Source Energy Partners L.P.
Seadrill Partners LLC
). All these stocks sport a Zacks Rank #1 (Strong Buy).
HELMERICH&PAYNE (HP): Free Stock Analysis
NEW SOURCE EGY (NSLP): Free Stock Analysis
PATTERSON-UTI (PTEN): Free Stock Analysis
SEADRILL PTNRS (SDLP): Free Stock Analysis
To read this article on Zacks.com click here.