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Transocean (NYSE:RIG): Current price $52.97
The offshore oil driller is being pressed by the ‘activist investor’ Carl Icahn to boost its dividend, but certin analysts believe that Transocean would be better off using some of its extra cash for purchases to counter lagging growth. As it is, the firm is projected to increase revenue more slowly through 2016 than 87 percent of its similar-sized peers, says data compiled by Bloomberg. Iberia Capital Partners has said that Transocean should use its $5.1 billion in cash to search out a deal that would upgrade its fleet and improve sales growth, instead of giving in to Icahn’s demand for a larger dividend. The analyst Brad Hunter at Jefferies commented that “if you’re trying to do things for your shareholders, growth is an important part of that story.” An acquisition, along with Transocean’s planned dividend, is “a better long-term solution.”
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