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I named Helmerich & Payne (HP) #6 in my Special Report on the 10 most dangerous stocks for this earnings season on my paid site. And today I’m selling the shares out of my Dividend Portfolio.

After naming Pioneer Natural Resources (PXD) #4 and Diamondback Energy (FANG) #5 in that Special Report, I asked What do those two oil shale producers have in common? They’re both cutting capital spending budgets. They’re not alone. Budgets are falling across oil shale geologies in the United States and that’s leading to a decline in the number of rigs working in the oil shale fields. Last week the number of active oil and gas rigs in the United States fell for the second week in a row, according to Baker Hughes, while actual U.S. production was stagnant for the week. The total number of active oil and natural gas drilling rigs fell by 10 and the number of active oil rigs dropped by 8 to 816. That’s a significant drop from the high of 888 last November.

We may have hit the peak in the number of working rigs for this cycle–Morningstar thinks so–but the near term trend is bad enough for Helmerich & Payne. The company gets its revenue and earnings growth from increases in the number of working rigs and from the accompanying increase in day rates for drilling rigs. In the fourth quarter of 2018, for example, the company saw its U.S. land rig count grow by 4% from the third quarter. Add in an increase in day rates, and revenue for the land rigs segment climbed by 6%. Operating margins picked up slightly to 6.6% from 5.6%. But the drop in the U.S. rig count and the possibility that the company has hit the peak in day rates makes Helmerich & Payne very vulnerable to a downside earnings surprise when the company reports earnings on April 25.

It’s not like the company has been a paragon of earnings stability or predictably in recent quarters. Look at the track record for recent quarters: On January 29, 2019 the company announced earnings of 42 cents a share, beating the consensus by 12 cents a share; on November 15, 2018, the company reported 19 cents a share, beating by a penny; on July 25, 2018 the company reported a loss of a penny a share, missing Wall Street estimates by 6 cents a share; and on April 26, 2018, Helmerich & Payne hit estimates on the head, reporting a loss of 5 cents a share. (A year earlier the company had lost 47 cents a share.)

On that track record, it would be a surprise if Helmerich & Payne didn’t miss/surprise on earnings. A miss would almost certainly hit the shares, which closed at $55.56 on March 29. The shares traded at $50.68 on January 23 and then climbed to $52.81 by March 8, before continuing to rally to the March 29 price of $55.56. The shares pay a dividend yield of 4.99% but the stock went ex-dividend on February 7, so anybody buying the shares for the dividend will have to wait a while for the next payment. Helmerich & Payne is a member of my Dividend Portfolio.