Drilling Oil & Gas Wells
Helmerich & Payne, Inc., together with its subsidiaries, provides drilling services and solutions for exploration and production companies. The company operates through three segments: North America Solutions, Offshore Gulf of Mexico, and International Solutions. The North America Solutions segment drills primarily in Colorado, Louisiana, Montana, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, Utah, West Virginia, and Wyoming. The Offshore Gulf of Mexico segment has drilling operations in Louisiana and in U.S. federal waters in the Gulf of Mexico. The International Solutions segment conducts drilling operations in Argentina, Bahrain, Colombia, and the United Arab Emirates. As of September 30, 2022, the company operated a fleet of 236 land rigs in North America; 28 international land rigs; and 7 offshore platform rigs. It also focuses on developing, promoting, and commercializing technologies designed to enhance the drilling operations, as well as wellbore quality and placement. In addition, the company owns and operates commercial real estate properties. Its real estate investments include a shopping center comprising approximately 366,000 leasable square feet; and approximately 176 acres of undeveloped real estate located in Tulsa, Oklahoma. The company was founded in 1920 and is headquartered in Tulsa, Oklahoma.
Discounted Cash Flow Valuation of Helmerich & Payne, Inc.
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $357.2M | $354.7M | $352.2M | $349.7M | $347.2M | $344.8M | $342.4M | $340M | $337.6M | $335.2M | $332.8M | $3.328B |
DCF | $308.4M | $266.3M | $229.9M | $198.5M | $171.4M | $148M | $127.8M | $110.4M | $95.28M | $82.27M | $822.7M | |
Value | $2.561B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 09-2015 | 09-2016 | 09-2017 | 09-2018 | 09-2019 | 09-2020 | 09-2021 | 09-2022 | 09-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 13% | -3.6% | -7.2% | 19% | -1.3% | -28% | -27% | 0.26% | 15% | 13% |
ROA | 9.4% | -0.38% | -2.7% | 0.51% | 0.35% | -13% | -8.5% | 1% | 14% | 11% |
ROE | 8.6% | -1.3% | -3.1% | 11% | -0.92% | -15% | -11% | 0.2% | 15% | 13% |
The average Net Margin over the past 5 years is -3.64%.
The trend of Net Margin over the past 5 years is -0.45%.
The average ROA over the past 5 years is -0.99%.
The trend of ROA over the past 5 years is +2.04%.
The average ROE over the past 5 years is -0.1%.
The trend of ROE over the past 5 years is +0.85%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 09-2015 | 09-2016 | 09-2017 | 09-2018 | 09-2019 | 09-2020 | 09-2021 | 09-2022 | 09-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | 2.03 | 1.01 | -12.44 | 6.40 | 1.23 | 1.22 | 27.98 | -32.53 | 1.24 | 1.53 |
Debt Equity | 0.12 | 0.11 | 0.12 | 0.11 | 0.12 | 0.15 | 0.52 | 0.20 | 0.20 | 0.19 |
MIN | ||||||||||
Graham Stability | - | - | -37% | 100% | -38% | -480% | - | - | - | -480% |
The Debt/FCF trailing twelve month is 1.53.
The trend of Debt/FCF over the past 5 years is -2.87.
Graham’s Stability measure stands at -4.79.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 09-2016 | 09-2018 | 09-2020 | 09-2022 | Trend |
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Revenue | 8.5% | 2.9% | 17% | 40% | 6.9% |
Net Income | - | -2.2% | - | 7.8K% | 980% |
Stockholders Equity | -6.9% | -8.8% | -5.8% | 0.23% | -0.4% |
FCF | -1.8% | 41% | 3.2% | - | -12% |
The Revenue CAGR over the past 5 years is +2.92%.
The trend of Revenue growth rate over the past 5 years is +6.86%.
The Earnings CAGR over the past 5 years is -2.19%.
The trend of Earnings growth rate over the past 5 years is +975.64%.
The Equity CAGR over the past 5 years is -8.76%.
The trend of Equity growth rate over the past 5 years is -0.4%.
The FCF CAGR over the past 5 years is +41.19%.
The trend of FCF growth rate over the past 5 years is -11.5%.