NEW YORK (TheStreet) -- Diamond Offshore (DO - Get Report) announced Monday that it would end its special dividend, which has been paid to shareholders since July 2006. And since 2010, that 75-cent-per-share special dividend has been one of the more attractive qualities of the stock.

Uncertainty over oil prices remains, and with drillers being among the primary casualties of weak crude prices, Diamond, headquartered in Houston, says it wants to retain cash to allow it to capitalize on future opportunities that may emerge. While that was a prudent choice for the company, it angered shareholders, who punished Diamond and sent shares down by more than 6% Monday. Investors are overreacting, however, to something that shouldn't have come as a surprise.

Diamond is also signaling that better days are around the corner, and this selloff in the stock shouldn't last long once analysts finish dissecting the numbers. For investors looking for a buying opportunity, Diamond shares -- down 30% in the last six months -- are now too cheap to ignore.

Lower oil prices also caused the company to report a 7% year over year drop in fourth-quarter revenue to $675.3 million. The company also said utilization rates for its ultra-deepwater rigs declined to 66% from 80% last year. This is an important metric for Diamond shareholders because it underscores the lack of demand for Diamond's biggest asset: its fleet of rigs. The amount of money a drilling contractor like Diamond gets paid is based on the number of days its rigs stay in operation. If its entire fleet remains operable each day, it makes more money. Conversely, it loses money if rigs are idle for any extended period of time.

In this case, with demand falling -- as evidenced by that 14 percentage-point drop in rig utilization -- the decision to cut the special dividend shouldn't have surprised anyone. What was a surprise, however, was that the company did declare a regular cash dividend of 12.5 cents per share, which indicates some confidence in its long-term outlook.

And an encouraging signal to shareholders, Diamond continues to push forward with various forward-looking projects. "In 2014, we took delivery of three new-build drillships and two deepwater semis, and in the first quarters of 2015 and 2016, respectively, we expect to take delivery of our fourth new-build drillship and a new-build harsh environment semisubmersible," said CEO Marc Edwards in a statement. "All of our new-build units have attractive term contracts in place," Edwards added.

That's he said "attractive term contracts" implies that Diamond can rely on recurring sustainable revenue for at least fiscal year 2015. And "attractive" would also indicate that Diamond may make above-average utilization rates for the duration of those contracts. Without more details, we can only speculate about precisely how "attractive" those contracts are. But that the company was still able to beat fourth-quarter earnings per share estimates (earned 72 cents vs. 66 cents estimate) in the current low oil price environment is a sign that not only does Diamond knows how to manage its money, it can still make money even in a time of declining revenue.

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TheStreet Ratings team rates DIAMOND OFFSHRE DRILLING INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate DIAMOND OFFSHRE DRILLING INC (DO) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and weak operating cash flow."

You can view the full analysis from the report here: DO Ratings Report

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.