Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Dilemma?
#17
(12-08-2014, 02:52 PM)Vincenzo Wrote: HP's debt/equity is 1.64 and its current ratio is 2.52 according to Yahoo Finance.

HP has been paying uninterrupted dividends for >= 25 years. Their 10-year dividend growth rate is 70%/year according to nasdaq.com. If you disregard the huge spike in payout in 2013 (from $0.07 to $0.50) and only count the years 2008-2012, the 5-year dividend growth rate is 9.56%/year.

HP's 5-year average dividend yield is 1.5% according to Yahoo Finance. It now stands at around 4%.

HP's payout ratio stands at 38% according to Yahoo Finance and Morningstar.

HPs 10-year average P/E is 15.96, according to Morningstar. It now stands at 9.77.

Would love to hear your thoughts based on these things. Thanks!

The above stats hold some sway with me. To which I add:
  • LT Debt = 40M, current portion of LT Debt is 40M. Wow, long term debt gone in a year. (From the 9/30 Q4 Balance Sheet)
  • Cash & equivalents on hand = $309M. A/P and accrued liabilities total $464M. They could almost pay that off if they shutdown all their rigs today.
  • Interest coverage ratio is greater than 10x.

From all the reading I've done, management has been fairly conservative. The big dividend increases were a little surprising to me but I'm thinking management took into account what could happen. Even with news of declining demand, they boosted the dividend another 10%. Why not 7% or 8% to be conservative; especially after those two big jumps in the last few years? Still would put them in their normal range.

They've survived the Great Recession, the 90's slump and all the other wild swings of the last 40 years.

They developed the Flex-Rig with standardized components. This alone I imagine benefits them in training and manpower flexibility.

Are you willing to hold should earnings be cut in half? What about a dividend freeze if things get really bad? At 4+% yield and reinvested, I can be very patient.

I'd recommend M$$I's suggestion -- buy in pieces. I'm waiting for a further drop since I'm about 2/3 of the way there.
=====

“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan


Reply


Messages In This Thread
Dilemma? - by Vincenzo - 11-28-2014, 04:27 PM
RE: Dilemma? - by Jimbo - 11-28-2014, 04:39 PM
RE: Dilemma? - by Roadmap2Retire - 11-28-2014, 06:08 PM
RE: Dilemma? - by Main Street Stock Investor - 11-29-2014, 10:01 AM
RE: Dilemma? - by ronn38 - 11-29-2014, 12:31 PM
RE: Dilemma? - by Be Here Now - 11-29-2014, 01:16 PM
RE: Dilemma? - by CritMass - 11-29-2014, 06:45 PM
RE: Dilemma? - by Vincenzo - 12-01-2014, 04:48 AM
RE: Dilemma? - by CritMass - 12-01-2014, 07:12 AM
RE: Dilemma? - by Be Here Now - 12-01-2014, 11:05 AM
RE: Dilemma? - by Vincenzo - 12-08-2014, 10:48 AM
RE: Dilemma? - by Be Here Now - 12-08-2014, 11:07 AM
RE: Dilemma? - by Roadmap2Retire - 12-08-2014, 01:26 PM
RE: Dilemma? - by Vincenzo - 12-08-2014, 02:52 PM
RE: Dilemma? - by Dividend Watcher - 12-08-2014, 08:14 PM
RE: Dilemma? - by EricL - 12-08-2014, 04:02 PM
RE: Dilemma? - by Main Street Stock Investor - 12-08-2014, 05:37 PM



Users browsing this thread: 1 Guest(s)