Helmerich & Payne
Trailing P/E: 10.3
2013 P/E: 11.2
The contract drilling business accounts for almost all of Helmerich & Payne’s (NYSE:HP) operating revenues. But of course, lower rig counts also have hurt this firm. However, like C&J, the longer-term is rosy for HP.
Its cost advantage in building new rigs will allow it to increase market share in the coming years. Analysts expect 2013 E&P capital spending budgets will be up about 10% to 20% year-over-year and will focus more on U.S. and Canadian mixed shale fields.
At the same time, the recent strength in natural gas and shale oil pricing should boost E&P firm cash flows and provide strong incentives for increased drilling in the new year. Roughly 80% of HP’s customer base comprises major oil companies and large-cap independent E&Ps.