Helmerich and Payne Inc (HP)

[Timothy Smith]

Key highlights from earnings report:

EPS came in at $1.37 per share, easily beating estimates of $1.16 a share.

Revenue also rose 27 percent to $819.8 million, topping estimates of $780.4 million.

The company said lower rig expenses and an increase in drilling activity boosted margins at its U.S. land operations (86% of total revenues) in the third quarter.

Five reasons HP is a solid value at $46 a share:

The stock is selling near the bottom of its five year valuation based on P/E, P/B, P/CF and P/S.

Analysts expect over 20% revenue growth in FY2012 and near 10% growth in FY2013. The stock sports a five year projected PEG of under 1 (.71).

The company doubled operating cash flow from FY2010 to FY2011, and the stock is selling for 5 times operating cash flow.

HP has lost about a fifth of its value so far this year, compared with a less than 2 percent fall in the wider U.S. Dow Jones Oil equipment services index.

The company has newer rigs and higher utilization (over 90%) than its peers. S&P has a "Buy" rating and a $69 a share price target on the stock.