Helmerich & Payne: A Strong Buy - Analyst Blog

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On Mar 13, Zacks Investment Research upgraded oil and gas drilling contractor Helmerich & Payne Inc. ( HP ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Consistent performance from Helmerich & Payne, together with impressive first quarter fiscal 2013 (three months ended Dec 31, 2012) results, have sparked upward earnings estimate revisions. In fact, the company has delivered positive earnings surprises in each of the last three quarters with an average beat of 12.45%.

The long-term expected earnings and sales growth projections for Helmerich & Payne are also fairly impressive, at 6.25% and 11.69%, respectively.

Helmerich & Payne reported first quarter fiscal 2013 results on Jan 31. Quarterly earnings per share from continuing operations (excluding special items) came in at $1.40, beating the Zacks Consensus Estimate of $1.29. Compared with the year-ago adjusted profit, the results increased 8.5% from $1.29 per share.

Revenues in the quarter were $844.6 million, up 15.3% from the first quarter of fiscal 2012 and also surpassed our projection of $823.0 million. The result was aided by better drilling activities and innovative technological applications.

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.

Additionally, Helmerich & Payne also increased its first quarter common stock dividend by more than 100% to 15 cents per share (60 cents per share annualized).

Over the last 60 days, the Zacks Consensus Estimate for second quarter of fiscal 2013 has increased by 5.55% to $1.26 while that for fiscal 2013 went up 6.31% to $5.22 per share.

Other Stocks to Consider

Other stocks worth considering in the energy sector include EPL Oil & Gas Inc. ( EPL ), Range Resources Corp. ( RRC ) and Marathon Petroleum Corporation ( MPC ). All these firms - sporting a Zacks Rank #1 (Strong Buy) - offer value and are worth accumulating at current levels.

EPL OIL&GAS INC (EPL): Free Stock Analysis Report

HELMERICH&PAYNE (HP): Free Stock Analysis Report

MARATHON PETROL (MPC): Free Stock Analysis Report

RANGE RESOURCES (RRC): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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