High Yield Deepwater Drilling Stocks
Mon, Aug 9, 4:15 PM ET, by eDividendStocks.com
The market seems to have recovered from the panic sessions that we saw in late spring and early summer. The Dow Jones index has risen 10% since the 4th of July break and the market volatility seems to have calmed (at least for the time being). The recent market rally has been spread across all sectors with Materials and Energy stocks leading the way. No sector reflects the markets attitude change more clearly than the deepwater drilling stocks. Led by Transocean (RIG: 56.8399 -0.47%), the deepwater drilling stocks had seen their stock prices fall almost daily since the Deepwater Horizon rig explosion in the Gulf of Mexico in late April. However, that story has changed completely for the sector over the past few weeks. Transocean's shares have gained 23% since the end of June as has Rowan Companies (RDC: 27.16 +0.30%), but they have not been the top performing deepwater drilling stock. That distinction goes to Sea Drill (SDRL: 24.54 -1.01%). SDRL shares have surged nearly 36% since the end of June. The deepwater driller has most of their rigs in the North Sea and in Asia, and had virtually no exposure to the Gulf of Mexico. Dividend investors will know SeaDrill as well, because the stock yields an amazing 9.7%. SeaDrill pays such a high dividend, because the company believes it is important to return a significant portion of their free cash flow back to their shareholders. SeaDrill has already hiked their dividend twice this year. Diamond Offshore (DO: 65.64 -1.19%) has only seen their stock price rise 7% since the end of June. Diamond Offshore had offered a very high dividend yield, but the drilling moratorium in the Gulf of Mexico forced the company to cut their dividend last month. The stock still yields 5.3%, but investors that have seen the stock fall 32% since the beginning of 2010 are looking to other dividend options. Enso (ESV: 45.37 +0.55%) was the first driller to have its rigs recertified since the Deepwater Horizon incident and their shares have gained 15%. ESV stock yields 3.2%. At the time this article was published, the author held a financial position in SeaDrill Limited. Recommend This Article To Others:
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