4-Star Stocks Poised to Pop: Helmerich & Payne

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, oil and natural gas driller Helmerich & Payne (NYSE: HP  ) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Helmerich & Payne's business, and see what CAPS investors are saying about the stock right now.

H&P facts

Headquarters

Tulsa, Oklahoma (1920)

Market Cap

$3.40 billion

Industry

Oil & Gas Drilling

TTM Revenue

$1.90 billion

Management

CEO Hans Helmerich (since 1989)

CFO Douglas Fears (since 1988)

Return on Capital (average last three years)

17.3%

Competitors

Nabors Industries (NYSE: NBR  )

Patterson-UTI Energy (Nasdaq: PTEN  )

CAPS members bullish on HP also bullish on

Transocean (NYSE: RIG  )

Chesapeake Energy (NYSE: CHK  )

CAPS members bearish on HP also bearish on

General Motors (NYSE: GM  )

Ford Motor (NYSE: F  )

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 989 of 1,050 of the members who have rated H&P -- some 94% -- believe the stock will outperform the S&P 500 going forward. These Foolish bulls include DemonDoug and Cuchulainn1.

Four weeks ago, DemonDoug wrote that H&P "is the best oil driller out there. Expect them to outpace most if not all the other drillers when oil starts appreciating in price."

A pitch from Cuchulainn1 in April shares that bullish attitude, elaborating on H&P's long-term competitive advantages:

For CAPS I have greenthumbed the whole drilling sector. I am bullish on all of them, but I feel [Helmerich & Payne (H&P)] is special. The flexrig technology they use is excellent saving time and money for the contractor, allowing [H&P] to charge higher dayrates. ...

This is the driller that I proudly own in my real portfolio and I will be adding on dips. Best in breed, in a hot industry. [H&P] is mostly leveraged to the U.S. NatGas drilling, however their flexrigs are beginning to get some international attention. The only problem for the new clients is most of the flexrigs are already contracted years in advance. If only all of the companies in my portfolio had the same problem as [H&P] where demand is exceeding supply by a couple years.

What do you think about H&P, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Chesapeake Energy is a Motley Fool Inside Value pick. The Fool's disclosure policy always gets a perfect score.


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