Nabors Industries Ltd. (NBR), the land drilling contractor, has announced an increase in quarterly cash dividend on Jul 24 following its robust second-quarter financial results. The new dividend of 6 cents per unit (24 cents per unit annualized) reflects a sequential increase of 50%.
Nabors announced that the increased dividend will be paid on Sep 30 to shareholders of record as of Sep 9. Management at Nabors mentioned that this rise was backed by the company’s strong financial position and its intention to increase shareholders’ value. Management also added that with its strategic initiatives on track and a favorable future market scenario, more cash and higher shareholders’ value can be generated going forward.
Barbados-based Nabors conducts oil, gas and geothermal land drilling operations and is the largest land-drilling contractor in the world. It is also one of the major land well servicing companies and workover contractors in the U.S.
Nabors has consistently performed well in the past few quarters. On Jul 22, the company reported second-quarter 2014 earnings from continuing operations of 24 cents per share (excluding charges related to the sale of non-core assets), beating the Zacks Consensus Estimate by a penny.
The bottom line also increased by a whopping 200% from the year-ago quarter figure of 8 cents per share (from continuing operations). Impressive U.S. and international operations, along with improved production services, aided the results.
Total revenue of $1,623.5 million was up 10.1% from $1,474.2 million in the year-ago period. Higher sales from the Drilling and Rig Services segment and the Completion and Production Services unit led to the improvement.
Nabors currently has a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. market in the next one to three months.
One can also consider other players from the same industry like Helmerich & Payne, Inc. (HP), Patterson-UTI Energy Inc. (PTEN) and North Atlantic Drilling Ltd (NADL). All these stocks have the same Zacks Rank as Nabors.
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