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Contract drilling services provider Helmerich & Payne Inc. (HP - Analyst Report) raised its quarterly cash dividend to 50 cents per share ($2.00 per share annualized), representing an increase of a whopping 233% over the previous payout. The new dividend is payable on Aug 30, to shareholders of record as of Aug 15, 2013.

Helmerich & Payne, which reported impressive fiscal second quarter results in Apr, has bolstered its long-term earnings and cash flow visibility on the back of the company’s long term contracts and premium rates.

We believe that the dividend hike not only highlights Helmerich & Payne’s commitment to create value for shareholders but also underlines the rig supplier’s healthy financial condition and confidence in its business going forward.

The increased payout will not only provide investors with a juicy 3.2% yield but also leave the company with enough flexibility to keep on pursuing growth opportunities.

Incorporated in 1940, Helmerich & Payne is a leading drilling contractor with activities in the U.S. and overseas. Supported by a superior and diversified drilling fleet, together with a healthy financial profile, we expect Helmerich & Payne to sustain its profitability over the foreseeable future.

We believe its technologically-advanced FlexRigs will continue to benefit from the shift to complex onshore plays that require highly intensive solutions. However, slow activity levels and the challenging U.S. land rig environment remain areas of concern.

This accounts for Helmerich & Payne’s current Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at Newpark Resources Inc. (NR - Snapshot Report), Exterran Partners L.P. (EXLP - Snapshot Report) and Dawson Geophysical Co. (DWSN - Snapshot Report) as good buying opportunities. These energy equipment service providers – sporting a Zacks Rank #1 (Strong Buy) – have solid secular growth stories with potential to rise significantly from current levels.

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