Helmerich & Payne (HP) Stock Analysis
Helmerich & Payne Dividend
The Helmerich & Payne dividend has been paid continuously since 1959 and increased for 43 consecutive years; qualifying the company as a Dividend Champion and Dividend Achiever.
Current Dividend: $2.80
Dividend Yield: 3.6%
Cash Dividend Payout Ratio: 60%
Market Capitalization: 8.5 B
Enterprise Value: 8.0 B
Industry: Oil & Gas Drilling
Helmerich & Payne (HP) is a contract drilling company engaged in drilling of oil and gas wells for exploration and production companies.
The company is a global firm with land operations throughout the United States, in the Gulf of Mexico, and internationally in South America, the Middle East, and Africa.
Drilling – U.S. Land (80%)
Drilling – International Land (12%)
Drilling – Offshore (8%)
Helmerich & Payne is a leader in innovation. Its flagship product, FlexRig , provides unparalleled performance, value, and safety to its customers.
Innovation! Helmerich & Payne has outmaneuvered all its competitors to become the leader in U.S. land drilling. A pristine balance sheet and high operating cash flow add to an already compelling story.
The supremacy of its FlegRig line provides HP a competitive advantage over competitors. Their market share is increasing during the current challenging environment for the industry.
Low oil prices has caused the demand for oil rigs to plunge. There is tremendous oversupply of rigs available. As old contracts expire, renewals will be at much lower rates.
During challenging times the strong take advantage of the weak. HP has the financial strength to weather tough times and take advantage of the competition.
The company operates in an industry that is extremely competitive and prone to wide swings in supply and demand. A prolonged (many years) downturn in oil prices is hurting all players, including Helmerich & Payne.
Dividend Analyzer Checklist
(updated December 2016)
Dividend Safety Score (20/33 points)
Dividend Per Share (ttm): $2.76
Dividend Payout Ratio (ttm): -528%
Dividend Per Share (10 Year Growth): 32.3%
Cash From Operations (CFO) Per Share (ttm): $6.96
CFO Dividend Coverage (CFO / DPS): 2.5 (2/6 points)
Free Cash Flow (FCF) Per Share (ttm): $4.59
FCF Dividend Coverage (FCF / DPS): 1.7 (3/6 points)
Net Financial Debt: $ – 458 M
Total Assets: $6832 M
Net Financial Debt / Total Assets: -7% (11/12 points)
Net Financial Debt to EBITDA (ttm): 95%
Total Liabilities to Assets Ratio (Qtr.): 33%
Piotroski Score (1-9) (TTM): (4/9 points)
Profitability & Growth Score (18/33 points)
Revenue (10 Year Growth) *CAGR > 4.14%: 2.9% (0/4 points)
EPS Basic Cont. Operations (10 Year Growth) CAGR > 4.14%: 12.0% (4/4 points)
Cash From Operations (10 Year Growth) CAGR > 4.14%: 9.8% (6/6 points)
Operating Earnings Yield (ttm): 13.1 (7/7 points)
Net Income (ttm): $-57 M
Gross Profit (ttm): $725
Total Assets: $6832 M
Gross Profitability Ratio = GP / Total Assets: (1/12 points)
Cash Return On Invested Capital (CROIC)(tttm): 9%
Return on Invested Capital (ROIC): -1%
Return on Invested Capital (ROIC) (5 Year Median): 14%
Return on Invested Capital (ROIC) (10 Year Median): 15%
Valuation Score (23/34 points)
Free Cash Flow Yield (ttm): 5.5% (6/9 points)
EV to EBIT (ttm): 7.7 (8/9 points)
EV to EBITDA (ttm): 15.6 (3/9 points)
PE10: 14.9 (6/7 points)
Price to Sales Ratio (ttm): 5.2
Price to Book Value (ttm): 1.8
Price to Earnings Ratio (P/E) (ttm): n/1
TOTAL POINTS – (61/100) (50 is an average score)
*Compound Annual Growth Rate (CAGR)
**A Compound Annual Growth Rate of 4.14% = a 50% gain over 10 years.
Latest Earning Report: 11/17/2016
Estimated Next Earnings Report: 1/28/2017
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(updated December 2016)
Type of Investor / Recommendation
Large Diversified Dividend Portfolios / Above Average Option
Looking For Exposure to Energy Sector / Excellent Option
Deep Value Investors / AVOID
Helmerich & Payne (HP) is ranked #50 (out of 246) overall and #1 (out of 23) in the Energy Sector by the Dividend Analyzer.
This was an attractive stock for most of 2016; however the recent large increase in the price would cause me to hesitate unless I was specifically looking to boost my energy sector exposure.
Portfolio Position Disclosures:
DVB Dividend Kings & Aristocrats: None
DVB Dividend Growth: None
DVB High Income: None
Arbor Asset Allocation Model Portfolio (AAAMP): None
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