The purpose of our “In Focus” reports is to study the highest paying dividend stocks in detail to determine if they are also the best dividend paying stocks. In this issue, we feature Atwood Oceanics.
Atwood Oceanics (ATW) is an international offshore drilling contractor. It drills exploratory and developmental oil and gas wells for the global oil and gas industry. ATW has a fleet of 13 mobile offshore drilling units. Its fleet consists of ultra-deepwater rigs, deepwater semisubmersibles, and jackups.
Just reading the above description of ATW’s business hints at how incredibly risky ATW’s core business is. This risk is reflected in the price; ATW has one of the highest betas (beta = 2.04) of any company we follow. The fact that it is also a very small company (market cap = xx) only increases the inherent risk in this stock.
This firm’s inherent risk also shows in its operating results. ATW’s free cash flows are extremely erratic. And its dividend, though high now, has not been paid consistently; and the dividend is not, in our opinion, solid. The current dividend/Cash flow from operations ratio is misleading.
On the positive side, ATW’s balance sheet seems to be in decent shape (relative to its historical standards). And its sales growth has been outstanding. Furthermore, ATW’s price is low relative to earnings and sales.
ATW is definitely a high-risk/high-return type of an investment. And when you consider all its fundamentals, ATW deserves only an average rating. We do not consider ATW one of the top dividend paying stocks we cover.
Stat Sheet – Atwood Oceanics 4/14/16
|Industry||Oil Well Services & Equipment|
|Market Cap||$ 5.69|
|Growth Prospects||Above Average|
|Price Volatility||Above Average|
(Our assessment of this firm’s fundamentals will be in effect for the rest of calendar year 2016.)
If you would like to see the highest paying dividend stocks that we do consider the top dividend paying stocks we cover, click the link below.
Disclaimer – Information contained herein has been obtained from sources believed to be reliable. Neither the author nor the publisher guarantees the accuracy or completeness of the information and methods described. This information is offered as general commentary only. It is not intended as investment advice. Investment and trading of securities involves risk, including of loss of capital. Market conditions change over time, and no assurance can be given that a reader may apply the principles described to make a profit. The author and publisher expressly disclaim all and any liability to any person for any investment or trading decisions that the reader may make in reliance on this information.