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Helmerich & Payne Inc HP

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Stock XNYS Rating as of
$40.39 −0.05 (0.12%)
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As of Delayed Price Closed
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Company Report

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Helmerich & Payne Earnings: Recent Saudi Aramco Contract Should Help Offset Near-Term US Weakness

Brett Castelli,

Helmerich & Payne posted fiscal second-quarter earnings slightly under our forecasts. The company had $688 million of revenue, an 11% drop from its $769 million in revenue this time last year. Adjusted operating margin dropped 200 basis points sequentially to 15% from 17%. A weak natural gas market in the US market and recent E&P consolidations drove this downward trend, as both factors affected the firm’s largest segment. After updating our model for slightly lower revenue and higher capital expenditures, we lower our fair value estimate to $48 from $50. Our no-moat rating remains unchanged.

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Price vs Fair Value

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HP is trading within a range we consider fairly valued.
Price
$41.23
Fair Value
$52.00
Uncertainty
Very High
1-Star Price
$51.60
5-Star Price
$47.00
Economic Moat
Fltky
Capital Allocation
Ytqvmvpx

Bulls Say, Bears Say

Bulls

Successful implementation of automation technology will help lower drilling costs via increased drill efficiency and decreased labor expenses, ultimately lifting profit margins over time.

Bears

An increasingly commoditized rig industry will make it very challenging for H&P to return to (let alone maintain) profitability levels reminiscent of the mid-2010s.

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Trading Information

Previous Close Price
$40.44
Day Range
$40.04–41.20
52-Week Range
$30.41–46.55
Bid/Ask
$39.91 / $40.65
Market Cap
$3.99 Bil
Volume/Avg
1.2 Mil / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
11.26
Price/Sales
1.47
Dividend Yield (Trailing)
4.48%
Dividend Yield (Forward)
4.16%
Total Yield
8.33%

Company Profile

Helmerich & Payne maintains one of the largest fleets of land drilling rigs in the U.S. The company's FlexRig line is the leading choice to drill horizontal wells for production of U.S. tight oil and gas. H&P is present in nearly every major U.S. shale play and also has a small but growing presence internationally.
Sector
Energy
Industry
Oil & Gas Drilling
Stock Style Box
Small Value
Total Number of Employees
6,200
Website
https://www.helmerichpayne.com

Competitors

Valuation

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Metric
HP
HAL
PTEN
Price/Earnings (Normalized)
 11.2612.127.33
Price/Book Value
 1.423.540.96
Price/Sales
 1.471.500.76
Price/Cash Flow
 5.539.212.94
Price/Earnings
HP
HAL
PTEN

Financial Strength

Metric
HP
HAL
PTEN
Quick Ratio
 1.611.301.16
Current Ratio
 2.162.121.41
Interest Coverage
 27.325.986.69
Quick Ratio
HP
HAL
PTEN

Profitability

Metric
HP
HAL
PTEN
Return on Assets (Normalized)
 8.45%11.75%7.45%
Return on Equity (Normalized)
 13.43%31.52%12.24%
Return on Invested Capital (Normalized)
 10.78%18.09%9.95%
Return on Assets
HP
HAL
PTEN
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Oil & Gas Drilling Industry Comparables

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Morningstar Rating for Stocks
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Economic Moat
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Noble Corp PLC Class A—Wdz$6.6 Bil
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Patterson-UTI Energy IncMrpqsNzn$4.5 Bil
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Sinopec Oilfield Service Corp Class H—Kgcs$3.9 Bil
SDRL
Seadrill Ltd—Kdjn$3.5 Bil
BORR
Borr Drilling Ltd—Rsmy$1.4 Bil
DO
Diamond Offshore Drilling Inc—Phlg$1.4 Bil
ODFJF
Odfjell Drilling Ltd—Cxct$1.1 Bil
PDS
Precision Drilling CorpNvxhlfmsDbgx$993.9 Mil
NBR
Nabors Industries LtdBpwzxjpfrFtbfh$763.9 Mil

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