Helmerich & Payne’s dividend and dividend yield
Helmerich & Payne (HP) increased its dividend from fiscal 2009 through fiscal 2015. In fiscal 2015, Helmerich & Payne’s DPS (dividend per share) increased 13% to $2.75 compared to $2.44 per share dividend in fiscal 2014. Although Helmerich & Payne’s net income decreased in fiscal 2015, the strong dividend reflects management’s confidence in the company’s balance sheet and growth prospects. By contrast, HP’s industry peer Cameron International (CAM) does not pay a dividend.
Dividend yield expressed as DPS relative to share price has generally been on a rise from fiscal 2009 until fiscal 2015. From fiscal 2014 to fiscal 2015, HP’s share price declined by 21%, while its DPS increased. HP’s dividend yield increased from 4.1% as of December 31, 2014, to 4.5% as of March 21, 2016.
Earlier, from fiscal 2009 to fiscal 2014, HP’s share price increased by 69%, while its DPS shot up to 11.2x. In effect, dividend yield increased from 0.5% as of December 31, 2009, to 2.4% as of December 31, 2014.
Will Helmerich & Payne increase dividend in 2016?
Helmerich & Payne intends to keep dividend unchanged in fiscal 2016 compared to fiscal 2015. HP’s strong liquidity position, long-term contract backlog, and reduced capital expenditure should help maintain the existing dividend level. Helmerich & Payne represents 0.04% of the SPDR S&P 500 ETF (SPY).
In this next part, we’ll discuss the company’s historical valuation multiples.