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Will Helmerich & Payne, Inc. Raise Its Dividend in 2017?

HP Dividend Chart

Oil and gas stocks have gone through tough times lately, and Helmerich & Payne (NYSE: HP) hasn't been immune from the volatility in the energy industry over the past couple of years. Yet the oil drilling rig builder and leasing company has something going for it that most of its peers don't: membership in the elite Dividend Aristocrats group, all of which have boosted their annual payouts each and every year for at least a quarter-century.

Helmerich & Payne has gone a lot further than that, putting together a 44-year consecutive streak of paying higher annual dividends despite all the ups and downs in oil prices over the year. With oil prices starting to climb again, will the company make it 45 years in a row in 2017? Let's look more closely to see whether Helmerich & Payne can extend its streak this year.

HP Dividend Chart

HP Dividend data by YCharts .

Yet in 2013, Helmerich & Payne dramatically changed its dividend strategy. Company Board Chairman Hans Christian Helmerich said at the time, "Our bias is toward dividends, and we will consider dividend increases as an important component of building long-term value for our shareholders." In response, Helmerich & Payne more than doubled its quarterly payout from $0.07 to $0.15 per share early in 2013, and then boosted it all the way to $0.50 per share during the second half of the year. From there, two more dividend increases in quick succession brought the quarterly dividend all the way up to $0.6875 per share.

Going back to old ways?

Following that big jump, though, Helmerich & Payne has renewed its former sluggish growth in its payout. Since the last big raise in August 2014, Helmerich & Payne went through 2015 without changing its quarterly payout, and gave investors only a 2% bump in 2016. CFO Juan Pablo Tardio assured investors that, despite tough conditions in the energy market, "our strong balance sheet and high liquidity position, along with our firm backlog of long-term contracts and reduced [capital expenditure] requirements, should continue to allow us to sustain the level of our regular dividend payments."

Note, though, that sustaining the dividend isn't the same as raising it. If Helmerich & Payne has indeed gone back to doing dividend increases only every other year, then investors might have to wait a while to see another increase.

Will Helmerich & Payne raise its dividend in 2017?

As far as the Dividend Aristocrats are concerned, Helmerich & Payne will be able to extend its streak simply by continuing to pay its current $0.70 per share dividend all year long, because that would bring the year's total above 2016 levels. Indeed, given the uncertain conditions in the industry right now, it's likely that Helmerich & Payne will take advantage of that technicality and choose not to do a dividend increase in its quarterly amount during 2017. Instead, look for another token increase in 2018 unless big changes in the energy markets warrant a different response.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

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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