Forget Helmerich & Payne, Inc.: These 3 Stocks Are Better Buys

There's nothing inherently wrong with oil and gas drilling company Helmerich & Payne, Inc. (NYSE: HP). The real problem is that it's in a highly cyclical industry, which means you need a strong stomach to ride the often-wild earnings swings. However, if what's attracted you to the company is its hefty 6.4% dividend yield and a long history of annual dividend increases, you have other options in the energy space. Consider looking at Enterprise Products Partners L.P. (NYSE: EPD), Magellan Midstream Partners, L.P. (NYSE: MMP), and Holly Energy Partners, L.P. (NYSE: HEP).

Helmerich & Payne builds drill rigs, rents them out, and runs them for oil companies. It focuses on the U.S. onshore market, where it derived about 80% of its revenues in the fiscal second quarter. To give you an idea of just how volatile this business can be, a year ago only 24% of the company's U.S. rigs were working. Today that number is up to 54%.

Although the company is used to this and focuses on protecting its cash flow so it can support its dividend and 44 consecutive years of annual dividend growth, there's a lot of variability in its top- and bottom-line results. A big determinant of rig demand is energy prices: when oil prices are high, more drilling tends to take place; when prices are low less drilling takes place.

Source: Fool.com