NOV - NOV: Dividends Reinstated But Keep Expectations Low

• The oilfield equipment provider, NOV, has recently reinstated its dividends after completely suspending them earlier in 2020.
• Whilst this hopefully foretells brighter days on the horizon, sadly their operating cash flow remains down around two-thirds year-on-year.
• Unless this chronically weak cash flow performance improves, they cannot adequately cover their freshly reinstated but still very low dividends.
• Thankfully their very healthy financial position remains one bright spot and thus they can easily avoid bankruptcy.
• Given this situation and the outlook for restrained oil and gas drilling, it seems prudent for investors to keep their expectations low and thus I believe that a neutral rating is appropriate.

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