Helmerich & Payne: Best-In-Class Driller Trading At Trough Multiples

(8min)

Summary

  • Helmerich & Payne is undervalued due to macro headwinds, integration costs, and Saudi rig suspensions, but maintains industry-leading rigs and strong margins.
  • The company boasts a $7.6bn backlog, high-margin performance contracts, and a 6.9% dividend yield, providing multi-year revenue visibility and shareholder returns.
  • Despite sector-wide rig count declines, temporary cash flow compression and HP's cost-saving synergies support long-term growth potential.
  • I believe buying a small position now is attractive, as the market has priced in negatives, and the upside remains when the cycle turns.

group of drilling rigs in Vaca Muerta (Neuquen)

Cristian Martin/iStock via Getty Images

Summary

Helmerich & Payne, Inc. (NYSE:HP) is one of the world’s largest onshore drilling contractors. It owns and operates industry-leading rigs. The company has been penalized heavily for both macro and company-related reasons such as

This article was written by

I am currently working as an investment analyst at a family office. My specialty is identifying high-quality and/or severely mispriced investment ideas. I believe that a great investment idea would "jump" at you intuitively and it comes in buying great companies at great prices. If you like my investment ideas, please do give me a follow!In my free time, I like to read books to educate myself and watch shows on Netflix.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About HP Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on HP

Related Stocks

SymbolLast Price% Chg
HP
--