Global large-cap energy equipment maker, National Oilwell Varco Inc. (NOV - Free Report) , announced that the spin-off of its distribution business, NOW Inc., has finally reached completion.
The new entity will debut in the NYSE today under the symbol DNOW. National Oilwell also stated that Merrill A. Miller, Jr. will act as the new executive chairman of NOW.
As previously mentioned, for every four shares of NOV, one share of the new entity was issued to National Oilwell stockholders as of May 22. Also, for any fractional share issue, the stockholder is expected to receive a cash payment after the issue is sold in the open market.
National Oilwell’s management stated that the spin-off was in accordance with its strategy to enhance long-term value for shareholders. The separation of its distribution business should unlock value for the company.
Houston, TX-based National Oilwell is a world leader in the design, manufacture and sale of comprehensive systems, components, products and equipment used in oil and gas drilling and production worldwide.
Last month, National Oilwell announced an increase in its quarterly cash dividend to 46 cents per share ($1.84 annualized), up almost 77% from 26 cents. This indicates the company’s confidence in its financial condition and future cash flow growth.
National Oilwell, which ranks ahead of Cameron International Corp. as the largest U.S. maker of oilfield equipment, currently carries a 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 consider better-ranked players from the oilfield machinery and equipment industry such as Matrix Service Company (MTRX - Free Report) and Weatherford International Ltd. (WFT - Free Report) . While Matrix sports a Zacks Rank #1 (Strong Buy), Weatherford International has a Zacks Rank #2 (Buy).