Helmerich & Payne (NYSE:HP) is making money hand over fist with their oil drilling and real estate assets. While the major gas distributors like BP and Exxon are facing decreasing margins due to the falling price of gas, the drillers are still making money hand over fist.
HP is a Best of Breed company
Their long history of profits and forward movement puts them ahead of the competition in terms of dollars earned per rig and per day.
They Produce the Most Efficient Oil Rigs (aka FlexRigs) In the Drilling Industry
A flexRig is a device which is used to pump oil from underground to the surface. Their trademark FlexRigs are both safer and much more efficient than the traditional oil rig. Thus giving them a competitive advantage over their competitors. Hp’s Flexrigs reach efficiency ratios up to 53% better than traditional rigs, and its average daily cost of use is around $6,000 more than the traditional rig. This should mean BIG bucks for HP Investors.
HP’s stock is HIGHLY discounted
Using the Discounted Cash Flow model, HP’s stock is worth around $92 using a DCF average. Aperion analyst Lewis Kreps has a $60 price target as well. Also, HP offers 75% margin of safety which makes it a worthwhile investment.
Helmerich and Payne’s competitive advantage of the oil drilling industry makes this company a good stock pick.
HP 1-yr chart