Noble Corporation (NE, Financial) is expected to release its quarterly earnings on Wednesday, April 29 after the market close. Current consensus estimates call for revenues of $780 million and EPS of $0.52 per share. While Noble may struggle due to struggling oil prices, it looks like a good bet in the long-run.
London-based Noble Corp has one of the best fleets in the business, and by a long shot the best at keeping a current fleet contracted. That being said, I don't think they helped shareholders by turning off Paragon Offshore (PGN, Financial), particularly shareholders who owned Paragon stock. It can be contended that the organization had a leg up in the contracting game by dumping the apparatuses that may be an issue when re-contracting time came around. I am worried about the repugnance for new-form development going ahead; however, I do accept that this organization will serve as an amazing long haul holding and is near to being my top pick. Shareholders who hold this organization will keep on profiting from the brilliant contract scope and administrations responsibility to paying a dividend.
Being the leading contract drilling company, the company needed good bank capacity. Hence, it recently ended up with its existing revolving credit facilities and entered into two new credit facilities which will provide the company with a significant level of new, five-year bank capacity. Conclusively, the combined facilities total approximately $2.7 billion. Furthermore, it also added a new 364-day facility to increase its available liquidity.
Coming to dividends, this is yet another harbinger for the company’s growth. The company has an annual dividend payout of $1.5 per share and at a current price of $17.33, the stock offers a dividend yield of 9.9% valued at less than eight times forward earnings. This is why the cheap dividend stock solicitors should have their eyes on Noble. Dividend stocks always help gain traction over long-term investors as they get an opportunity to take an advantage out of the total profits that the company makes and also to reinvest them and make more. Noble is focusing on its multi-year new build construction program, which once completed will be attracting a lot of investors.
Oil Price
Oil prices have moved up in the last couple of weeks. From being close to $45 per barrel in March, prices have now moved to over $60 per barrel. Many firms have raised their forecast for oil prices and Noble Corp. looks well positioned to benefit from this. Analysts at Barclays said:
“"The oil market is not out of the woods yet and weak fundamentals will weigh on prevailing bullish market sentiment in the second quarter,"
Conclusion
The company looks well positioned to benefit from the increasing oil prices. Although I am skeptical about the company’s upcoming earnings, it looks like a good bet in the long-run. The company is trading at a very low valuation and can move to over $30 if oil prices reach their previous levels. Hence, I think Noble Corp. is a buy going into earnings.
