We have recently upgraded contract drilling services provider Helmerich & Payne Inc. (HP) to ‘Outperform’ from ‘Neutral’.
Helmerich & Payne is a major land and offshore drilling contractor in the western hemisphere, having the youngest and most efficient drilling fleet. The company 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.
With the industry requiring increasingly complex well designs, there is high demand for modern, technologically-sophisticated rigs. Given its newest and most technologically-advanced land rig fleet, Helmerich & Payne is well positioned to take advantage of this scenario, while continuing to gain market share and adding value for its shareholders and customers. A relatively conservative financial policy and a high quality client base are other positives in the Helmerich & Payne story.
Shares of Helmerich & Payne hit a 52-week high of $68.06 on Tuesday, March 29. The contract driller has seen its share price climb more than 80% since the end of August last year, as investors have been buying stocks of the company for its attractive fundamentals and positive outlook. The turnaround in fuel prices amid recent optimism about economic recovery have added to this bullishness.
As such, we believe Helmerich & Payne – which competes with other U.S. drilling companies including Patterson-UTI Inc. (PTEN) and Nabors Industries (NBR) – is well positioned going forward and view it as an attractive investment. Our long-term Outperform recommendation is supported by a Zacks #1 Rank (short-term Strong Buy rating).
Incorporated in 1940, Helmerich & Payne is engaged in the contract drilling of oil and gas wells in the U.S. and internationally. The company supplies drilling rigs, equipment, personnel and camps on a contractual basis to explore for and develop oil and gas from onshore areas and from fixed platforms, tension-leg platforms and spars in offshore areas. Helmerich & Payne’s contract drilling business consists of three reportable business segments: U.S. land drilling, offshore drilling and international land drilling.
HELMERICH&PAYNE (HP): Free Stock Analysis Report
NABORS IND (NBR): Free Stock Analysis Report
PATTERSON-UTI (PTEN): Free Stock Analysis Report
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