Rising Rig Count Makes Helmerich & Payne Look Attractive

Stocks to buy
  • Helmerich & Payne (HP) is a premier American oil and gas driller in a time when fossil fuel supplies are threatened.
  • Moreover, the company’s recently released data suggests that Helmerich & Payne is making strides in working toward profitability.
  • Investors should put Helmerich & Payne on their watch lists as the company augments its already sizable rig count.
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Founded in 1920, Helmerich & Payne (NYSE:HP) drills for oil and natural gas in the U.S. and internationally. In a time when the balance between supply and demand of fossil fuels is threatened, HP stock could continue its move to the upside.

Helmerich & Payne is known as one of America’s and the world’s most ambitious fossil fuel drillers. The company prides itself on having a large and capable fleet, and on being a technology and innovation leader.

These strengths will surely come into play as the U.S. and other nations strive to enhance their energy security. Against this backdrop, the data will show that Helmerich & Payne could soon close its profitability gap. Besides, the company’s growing rig count demonstrates Helmerich & Payne’s ongoing role as a significant oil and gas producer.

HP Helmerich & Payne $47.72

What’s Happening with HP Stock?

When HP stock bottomed out near $21 late last year, the sentiment surrounding Helmerich & Payne was decidedly bearish. However, the tide would turn quickly, and lately the stock has been on a strong upward trajectory.

There are a number of likely reasons for the rebound in the Helmerich & Payne share price. The most obvious one, perhaps, is the developed world’s renewed emphasis on domestic energy independence and security.

As a result of the Russian invasion of Ukraine, domestic drilling will undoubtedly remain a priority in 2022 in the U.S., E.U. and elsewhere. Consequently, it was a welcome news development when Helmerich & Payne disclosed an increase in the company’s rig count.

Here’s the breakdown. At the end of the second quarter of fiscal-year 2022, Helmerich & Payne North America Solutions segment counted 171 active drilling rigs. This figure represents a 10% year-over-year increase.

Looking beyond the U.S., Helmerich & Payne continues to pursue drilling opportunities in potentially fuel-rich regions. According to Helmerich & Payne President and CEO John Lindsay, “In South America, Argentina and Colombia remain areas of focus and we have begun to re-contract rigs located in those countries.”

Narrowing the Loss

On the financial side, Helmerich & Payne revealed data points that should encourage the HP stock bulls. Notably, the company reported $467.6 million in revenue for the second quarter of fiscal-year 2022.

This is a vast improvement over the $296.2 million recorded in the year-earlier quarter. It’s also 6.02% higher than the Wall Street analyst consensus estimate.

Turning to the bottom-line results, Helmerich & Payne posted a quarterly earnings loss of 17 cents per share. Now, this might not sound like a great result, but let’s put it in context.

First of all, Wall Street’s analysts, on average, were anticipating a quarterly earnings loss of 32 cents per share. Besides, Helmerich & Payne sustained a loss of 60 cents per share in the year-earlier quarter.

The name of the game here is improvement, not perfection. Helmerich & Payne appears to be closing the profitability gap, and a loss of 17 cents per share isn’t terrible for a $40-ish stock.

What You Can Do Now

With energy independence being a major priority nowadays, companies like Helmerich & Payne are encouraged to “drill, baby, drill.” That’s why the aforementioned drill-rig count increase is so important.

Helmerich & Payne is, furthermore, demonstrating improvement in its fiscal stats. Therefore, a long-term investment in HP stock could potentially enhance the returns of a diversified energy-stock portfolio.

On the date of publication, Louis Navellier had a long position in HP.  Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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