Top Picks 2017: Noble Corporation

01/24/2017 6:00 am EST


Bill Mathews

Editor & Founder, The Cheap Investor

Our Top Pick for 2017 for dividend investors is a leading UK-based offshore drilling contractor for the oil and gas industry, notes Bill Mathews, editor of The Cheap Investor.

Nobel Corporation (NE) is a well-known company; it has a solid balance sheet, yet it is selling near its low. Noble is a leading offshore drilling contractor for the oil and gas industry.

The company owns and operates one of the most modern, versatile and technically advanced fleets in the offshore drilling industry.

Through its subsidiaries, Noble performs contract drilling services with a fleet of 30 offshore drilling units, consisting of 16 semisubmersibles and drillships and 14 jackups.

The company is focused largely on ultra-deepwater and high-specification jackup drilling opportunities in both established and emerging regions worldwide.

The stock was a high-flying Wall Street favorite in May 2013, when it was selling at $35. Since then the stock has fallen dramatically, largely in response to the plunge in crude oil prices.

Insiders only own about 1% of the 243 million shares outstanding, but 385 institutions own 93% of the float (shares in public hands). 

The company has a healthy balance sheet with $426 million ($1.75 per share) in cash and a book value of $28.96 per share. While the company has an extremely large debt of $4.1 billion, it is in a capital-intensive industry, and huge debt is common. 

Nobel Corporation has a large amount of assets and pays $0.08 per share annually for a 1.4% dividend. If you think crude oil will continue to move upward, Nobel is a good stock to consider for investment.

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