Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Shares of Helmerich & Payne Inc. (HP - Analyst Report) reached a 52-week high of $79.56.15 on Nov 18. In fact, the Tulsa, Oklahoma-based contract drilling services provider has seen its stock price climb some 20% during the past six months.

Despite this price appreciation, we remain optimistic about the firm’s near-term prospects, supported by its superior and diversified drilling fleet, continued strong operating performance led by an efficient management team, and an investor-friendly financial policy.

These factors are reflected in Helmerich & Payne’s Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.

Why the Bullishness?

Helmerich & Payne is a major land and offshore drilling contractor in the western hemisphere, having the youngest and most efficient drilling fleet. The company, which has surpassed earnings estimates in each of the last 6 quarters, specializes in shallow to deep drilling in oil and gas-producing basins of the U.S. and in drilling for oil and gas in international locations.

We believe that 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. The company’s proprietary FlexRig design makes the rigs move faster than conventional rigs, drill quicker and more efficiently, and allows for a safer operating environment. As such, these are better suited for the new demands of the exploration business and, therefore, command higher dayrates and utilization than rigs from other land drillers.

Helmerich & Payne – which counts Nabors Industries Ltd. (NBR - Analyst Report) as one of its major competitors – recently approved a raise in its quarterly cash dividend to 50 cents per share ($2.00 per share annualized), representing an increase of more than 200% over the previous payout. The significant dividend hike not only highlights the company’s commitment to create value for shareholders but also underlines Helmerich & Payne’s strong cash generation capabilities.

Another positive in the Helmerich & Payne story is the quality of its client base, which mostly includes well-capitalized oil majors or large independents.

Other Stocks to Consider

In addition to Helmerich & Payne, one can look at Matador Resources Co. (MTDR - Snapshot Report) and SM Energy Co. (SM - Analyst Report) as good buying opportunities. These U.S. upstream energy operators, which sport a Zacks Rank #1 (Strong Buy) have solid secular growth stories with the potential to rise significantly from the current levels.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%