A Cheap Energy Stock With A Solid Dividend Yield

| About: RPC Inc. (RES)

Although value is harder to find in the market, it still can found; especially in certain sectors. I continue to be positive on the energy sector and am consistently finding bargains here. One stock, RPC, Inc. (NYSE:RES), I found recently has a solid dividend, low valuations and a history of robust growth. It also has underperformed the S&P by around 50% over the last six months, and is overdue for a rally.

6 reasons RES is a solid value at $14.50 a share:

  • It yields a solid 3.4% and grown its dividend at a robust 21% annual pace over the past five years.
  • The stock is selling near the bottom of its five year valuation based on P/E, P/S, P/CF and P/B.
  • The company's earnings have been lumpy over the past years. However, its average EPS growth over that time span is roughly 22% annually. Given that, the forward earnings of just over 7 seems too cheap.
  • It looks like it is establishing a bottom in this price range (See Chart)

(Click to enlarge)

  • The median analysts' price target for the 8 analysts that cover the stock is $20, which is significantly above current prices.
  • The stock has a dirt cheap projected five year PEG (.33) and sells for less than 6 times operating cash flow.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in RES over the next 72 hours.