Pason describes itself as a leading provider of data management systems for the onshore oil and gas drilling rigs industry. At the beginning of 2024, it purchased Intelligent Wellhead Systems (IWS), which provides similar digital solutions for well completions, for $88.5 million, the largest acquisition in its history, using some of the $171.7 million in cash on its balance sheet. It also has a small but rapidly growing Solar and Energy Storage unit for management of solar panel farms.
Income Investor
With a quarterly dividend increase of 8%, to $0.13 from $0.12, Pason yields 4.5%. This offsets some of the decline in the share price from over $18 a year ago. While its 30% decline in the last year is disappointing, Pason remains well positioned to continue to gain market share and increase revenues in both its traditional drilling segment and its new Completions division in IWS, which is both gaining new business and increasing margins as it can be sold as a joint offering with drilling. Buy now for its very reasonable valuation (14 times earnings) and sustainable yield, with upside when the industry dynamics become less unattractive. - Gavin Graham
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PSI was first recommended here on March 8, 2016