Ensco shares could continue rise to $70 - Barron's

NEW YORK Sun Jan 13, 2013 2:06pm EST

NEW YORK Jan 13 (Reuters) - Shares of Ensco Plc, the world's second-largest offshore driller, could rise to $70 as the company benefits from growing demand for deepwater drilling, Barron's said.

Ensco's shares have rallied by nearly 28 percent in the past year to $61.50 and are likely to continue to rise as earnings improve, the financial weekly said in its Jan. 14 edition.

The company also pays a 2.4 percent dividend, which means shareholders could see a total return of more than 15 percent in the next year, Barron's said.

Ensco's shares trade at 8.7 times this year's expected earnings, but the company may merit a richer valuation of around 10 times due to its free cash flow yield of 6 percent, which is the best in the industry, Barron's said.

The company also benefits from a highly regarded management team and a young fleet of deepwater rigs, the paper said.