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The Only 2 Offshore Drillers That Still Pay Dividends

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Dividend yield

A company’s dividend yield, which is calculated as its annual dividend as a percentage of its share price, shows how much it pays in dividends relative to its share price. Income investors value high-dividend-yield stocks.

You can also view dividend yield as a way to see how much cash flow investors are getting from each dollar they invest. High-dividend-yield stocks can be a good source of income, but at the same time, high dividends may come at the cost of growth potential. Paying out dividends means a company isn’t reinvesting that money in itself, which may hamper its growth prospects.

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Financial pressure on offshore drillers

Slumping oil prices have put offshore drillers (IYE) under financial pressure. The first victim of this pressure has been dividends. To preserve cash, offshore drillers have either eliminated dividends or cut dividends.

Eliminated dividends

Seadrill (SDRL) was the first offshore driller to eliminate dividends in November 2014. Pacific Drilling (PACD), Ocean Rig (ORIG), and Transocean (RIG) also suspended their dividends in 2015. In January 2016, Rowan Companies (RDC) eliminated its dividends.

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Ensco’s dividend

Ensco (ESV) paid its latest dividend of $0.01 per share in December 2017. For the last eight quarters, Ensco has paid the same dividend amount per share. The company’s dividend yield stands at 0.63%.

Seadrill Partners’ dividend

Seadrill Partners (SDLP) is popular among investors due to its high dividend yield. Seadrill Partners recently paid its shareholders a cash distribution of $0.10 per share—in line with its previous quarters’ distributions. The company has a dividend yield of 10.5%.

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