7 Best Oil Stocks under $20

4. Patterson-UTI Energy, Inc. (NASDAQ:PTEN)

Number of Hedge Funds Holders: 32

Share Price: $8.37

Patterson-UTI Energy, Inc. (NASDAQ:PTEN) provides contract drilling services to oil and gas operators across the U.S. and internationally. The company offers a range of services from onshore drilling and hydraulic fracturing to advanced data analytics for well optimization. It operates through three segments: Drilling, Completion, and Drilling Products.

Patterson-UTI Energy, Inc. (NASDAQ:PTEN) reported revenue of $1.348 billion and net income of $11 million in Q2 2024. Adjusted EBITDA for the quarter reached $324 million, excluding $11 million in merger/acquisition expenses related to the NexTier merger and Ulterra acquisition. Moreover, the company also returned $164 million to shareholders in the quarter through dividends and share repurchases. This was in line with Patterson’s capital allocation strategy, under which it aims to return $400 million to shareholders in 2024.

The company’s drilling segment performed strongly with a quarterly revenue of $440 million and gross profit of $179 million. It operated with an average revenue per day of $36,430, representing a slight increase from the previous quarter. As of Q2 end, the company’s contract backlog stands at $433 million for U.S. drilling rigs, with steady demand expected through the end of 2024. Overall, activity in natural gas basins showed slight improvement, while activity in oil basins remained stable.

The company’s integrated drilling and completion services have been well-received, with new contracts signaling long-term growth. Moreover, Patterson-UTI Energy, Inc.’s (NASDAQ:PTEN) natural gas fueling business delivered over 100 million diesel gallon equivalents, further boosting its leadership in the natural gas-powered equipment sector.

However, the company faced challenges from constrained natural gas takeaways in West Texas and New Mexico, leading Patterson to reduce activity in those regions. Moreover, disruptions from M&A activity also impacted the operations. The company’s share price declined by more than 30% over the past six months.

Despite that, Patterson-UTI Energy, Inc. (NASDAQ:PTEN) is optimistic about capital-efficient growth opportunities in international markets, such as the Middle East and offshore regions. Meanwhile, the Drilling Products segment has been gaining market share in the Ulterra division.

At the end of Q2 2024, 32 hedge funds have collectively invested $395 million in the company, according to Insider Monkey’s database. As a result, PTEN makes it to our list of the best energy stocks under $20 to buy.