Helmerich & Payne
This company primarily operates as a contract drilling company in South America, the Middle East, and Africa. Helmerich & Payne Inc. (NYSE: HP) provides drilling rigs, equipment, personnel and camps on a contract basis to explore for and develop oil and gas from onshore areas and fixed platforms, tension-leg platforms and spars in offshore areas. Its contract drilling business operates through three reportable segments: U.S. Land, Offshore and International Land.
The company posted second-quarter earnings that many felt came in much better than expected. At last report, the company’s U.S. Land rig segment, which is its largest business, had a utilization rate of 31%, compared to 68% this time last year. The International Land operations also saw utilization rates decline to 38%. What is slightly surprising, though, is that the average margin for a rig in use increased between this quarter and the same time last year.
Many top Wall Street analysts feel that the company is one of the best positioned for the U.S. land recovery, and they also cite the strong balance sheet and the sector leading dividend.
Investors are paid a 4.56% dividend. The whopping $72 Merrill Lynch price target compares with the consensus price objective of $59.32 and the most recent close at $61.36.
This Australia-based bank is way off the radar for most investors. Westpac Banking Corp. (NYSE: WBK) offers personal banking services, such as term and retirement deposits; savings and bank accounts; home, investment property, equity access, investment and protected equity, personal and car loans; overdraft facilities; and home, contents, landlords, motor, travel, boat, caravan and trailer, life, credit card and loan payment, and income protection insurance products.
The company also provides financial, investment, retirement planning, share market portfolios, super funds and share trading services; emergency cash, online, telephone banking, ATMs, travel center, private banking, financial education, financial advice assistance and foreign exchange historical rates services; and superannuation funds. In addition, it offers business banking services, including farm management deposits; small, commercial and agribusiness loans, as well as equipment finance; merchant services; business and farm insurance; and cash flow management, export and import services and trade finance products.
Westpac shareholders are paid a rich 6.1% dividend. The Merrill Lynch price target is $26.41 and is the only domestic company that appears to cover the stock. The stock closed most recently at $22.37.
These four solid companies are paying dividends above 4.5% and rated Buy at Merrill Lynch. While not suitable for all accounts, they make good sense for growth and income portfolios with a degree of risk tolerance.