| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 23.90 | -28 |
| Intrinsic value (DCF) | 19.24 | -42 |
| Graham-Dodd Method | 15.90 | -52 |
| Graham Formula | 11.40 | -66 |
Helmerich & Payne, Inc. (HP) is a leading provider of drilling services and solutions for exploration and production companies in the oil and gas industry. Headquartered in Tulsa, Oklahoma, the company operates through three key segments: North America Solutions, Offshore Gulf of Mexico, and International Solutions. With a fleet of 236 land rigs in North America, 30 international land rigs, and 7 offshore platform rigs, HP specializes in advanced drilling technologies that enhance operational efficiency and wellbore quality. The company also diversifies its revenue streams through commercial real estate investments, including a 390,000-square-foot shopping center and undeveloped land in Tulsa. Founded in 1920, HP has established itself as a trusted partner in the energy sector, leveraging innovation and a strong operational footprint to serve clients across the U.S., Latin America, and the Middle East. As the global energy demand evolves, HP remains a critical player in oil and gas drilling, with a focus on sustainable and high-performance solutions.
Helmerich & Payne presents a mixed investment case. On the positive side, the company benefits from a strong market position in North American land drilling, a diversified international presence, and a solid dividend yield of $1.17 per share. Its technological advancements in drilling efficiency provide a competitive edge. However, the company faces risks from volatile oil prices, cyclical demand in the energy sector, and high total debt of $1.86 billion. While its beta of 0.898 suggests lower volatility than the broader market, investors should weigh exposure to commodity price fluctuations. The company’s ability to generate positive operating cash flow ($684.7M) and maintain a disciplined capital expenditure strategy (-$495.1M) supports financial stability, but long-term growth depends on sustained energy sector recovery.
Helmerich & Payne competes in the highly cyclical oil and gas drilling industry, where operational efficiency and technological innovation are key differentiators. The company’s primary advantage lies in its FlexRig® technology, which enhances drilling precision and reduces downtime, making it a preferred contractor for U.S. shale operators. Its North America Solutions segment dominates its revenue, benefiting from a large, modern rig fleet. However, competition is intense, with rivals offering similar services at competitive rates. HP’s Offshore Gulf of Mexico segment faces pressure from offshore drilling specialists, while its International Solutions segment contends with regional players and geopolitical risks. The company’s real estate investments provide ancillary income but are not a core growth driver. Compared to peers, HP maintains a strong balance sheet with manageable leverage, but its reliance on U.S. land drilling exposes it to domestic market fluctuations. To sustain competitiveness, HP must continue investing in automation and digital drilling solutions while expanding its international footprint in stable regions.