Dividend Stocks To Buy #5 — Pacific Drilling (PACD)
Estimated Dividend Yield: 6.5%
An interesting play in the deepwater dividend stocks universe could be Pacific Drilling (PACD). After going public in 2011, the firm has been working hard to acquire new deepwater rigs and currently has five rigs in operation.
Three more rigs will delivered this year and next. Those rigs in operation are contracted out to energy giants Chevron (CVX), Total (TOT) and Petrobras (PBR). And having three of the largest oil majors sending you checks every day has worked in PACD’s favor.
The firm has announced that it plans on paying its first dividend since going public by the end of the year. Management at PACD estimates that it will be able to return about $152 million back to shareholders via a dividend. Based on the 217 million shares outstanding, that works out to be 71 cents per share of PACD stock — for a hefty dividend yield of 6.5%.
While it has a much smaller fleet size than the other deepwater dividend stocks on this list, PACD future status as a top payer among dividend stocks might be assured given who has contracted its rigs out. As it grows in size, PACD should be able to keep those payments going throughout the future.
For investors, that might make PACD stock the best firm on this list of deepwater dividend stocks.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.