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Oilfield services company National-Oilwell Varco (NYSE:NOV) raised its quarterly cash dividend to 11 cents per share (44 cents per share annualized), representing an increase of approximately 10.0%. The new distribution is payable on December 17 to shareholders of record as on December 3, 2010.

National-Oilwell Varco, which recently reported better-than-expected third-quarter results, has bolstered its long-term earnings and cash flow visibility on the back of the company’s strong backlog, which now stands at $4.9 billion. We believe that the dividend hike not only highlights the company’s commitment to create value for shareholders but also underlines the oilfield equipment supplier’s healthy financial condition and confidence in its business going forward.

Houston, Texas based National-Oilwell Varco, formerly 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.

The company reached its current form following the March 2005 merger between National-Oilwell and Varco International. National-Oilwell Varco organizes its operations in three business segments: Rig Technology, Petroleum Services & Supplies and Distribution Services.

National-Oilwell Varco, which ranks ahead of Cameron International Corp. (NYSE:CAM) as the biggest U.S. maker of oilfield equipment, currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.

We like National-Oilwell Varco’s healthy backlog, solid balance sheet and its strength in international operations, particularly in the Middle East and Brazil. The Advanced Production and Loading PLC (“APL”) acquisition will further boost National-Oilwell Varco’s earnings visibility by expanding its floating production storage and offloading vessel (“FPSO”) product line, one of the fastest-growing areas of the offshore market.

However, the uncertain commodity price outlook along with the soft global economy and the erosion of oil and gas demand continue to weigh on the company. We believe that National-Oilwell Varco’s current valuation adequately reflects its fairly balanced risk/reward profile.

Source: National-Oilwell Varco Ups Dividend 10%