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Supply Chain Risk

Financial Survey: Baker Hughes (NYSE:BKR) & Baker Hughes A GE (NYSE:BHGE)

Baker Hughes (NYSE:BKR) and Baker Hughes A GE (NYSE:BHGE) are both large-cap oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Baker Hughes and Baker Hughes A GE, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Baker Hughes 0 0 3 0 3.00
Baker Hughes A GE 0 1 10 1 3.00

Baker Hughes currently has a consensus target price of $30.00, indicating a potential upside of 33.04%. Baker Hughes A GE has a consensus target price of $31.55, indicating a potential upside of 39.52%. Given Baker Hughes A GE’s higher possible upside, analysts clearly believe Baker Hughes A GE is more favorable than Baker Hughes.

Dividends

Baker Hughes pays an annual dividend of $0.72 per share and has a dividend yield of 3.2%. Baker Hughes A GE pays an annual dividend of $0.72 per share and has a dividend yield of 3.2%. Baker Hughes pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Baker Hughes A GE pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares Baker Hughes and Baker Hughes A GE’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Baker Hughes $22.88 billion 1.01 $195.00 million $0.66 34.17
Baker Hughes A GE $22.88 billion 1.03 $195.00 million $0.66 34.26

Baker Hughes is trading at a lower price-to-earnings ratio than Baker Hughes A GE, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Baker Hughes and Baker Hughes A GE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Baker Hughes 0.89% 1.19% 0.78%
Baker Hughes A GE 0.71% 1.07% 0.71%

Volatility & Risk

Baker Hughes has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Baker Hughes A GE has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Institutional and Insider Ownership

97.5% of Baker Hughes shares are owned by institutional investors. Comparatively, 48.4% of Baker Hughes A GE shares are owned by institutional investors. 0.2% of Baker Hughes shares are owned by insiders. Comparatively, 0.2% of Baker Hughes A GE shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Baker Hughes beats Baker Hughes A GE on 6 of the 11 factors compared between the two stocks.

About Baker Hughes

Baker Hughes Company provides integrated oilfield products, services, and digital solutions worldwide. Its Oilfield Services segment offers drilling, wireline, evaluation, completion, production, and intervention services; and drilling and completions fluids, completions tools and systems, wellbore intervention tools and services, artificial lift systems, pressure pumping systems, and oilfield and industrial chemicals for integrated oil and natural gas and oilfield service companies. The company’s Oilfield Equipment segment designs and manufactures products and services, including pressure control equipment and services, subsea production systems and services, drilling equipment, and flexible pipeline systems; and onshore and offshore drilling and production systems, and equipment for floating production platforms, as well as provides a range of services related to onshore and offshore drilling activities. Its Turbomachinery & Process Solutions segment provides equipment and related services for mechanical-drive, compression, and power-generation applications across the oil and gas industry. Its product portfolio includes drivers, compressors, and turnkey solutions; and pumps, valves, and compressed natural gas and small-scale liquefied natural gas solutions. This segment serves upstream, midstream, onshore and offshore, industrial, engineering, procurement, and construction companies. The company’s Digital Solutions segment provides sensor-based measurement, non-destructive testing and inspection, turbine, generator and plant controls, and condition monitoring, as well as pipeline integrity solutions for a range of industries, including oil and gas, power generation, aerospace, metals, and transportation. It serves through direct and indirect channels. The company was formerly known as Baker Hughes, a GE company and changed its name to Baker Hughes Company in October 2019. Baker Hughes Company is based in Houston, Texas.

About Baker Hughes A GE

Baker Hughes, a GE company provides integrated oilfield products, services, and digital solutions worldwide. Its Oilfield Services segment offers drilling, wireline, evaluation, completion, production, and intervention services; and drilling and completions fluids, completions tools and systems, wellbore intervention tools and services, artificial lift systems, pressure pumping systems, and oilfield and industrial chemicals for integrated oil and natural gas, and oilfield service companies. The company’s Oilfield Equipment segment designs and manufactures products and services, including pressure control equipment and services, subsea production systems and services, drilling equipment, and flexible pipeline systems; and onshore and offshore drilling and production systems, and equipment for floating production platforms, as well as provides a range of services related to onshore and offshore drilling activities. Its Turbomachinery & Process Solutions segment provides equipment and related services for mechanical-drive, compression, and power-generation applications across the oil and gas industry, as well as products and services to serve the downstream segments of industry. Its product portfolio includes drivers, compressors, and turnkey solutions; and pumps, valves, and compressed natural gas and small-scale liquefied natural gas solutions. This segment serves upstream, midstream, onshore and offshore, industrial, engineering, procurement, and construction companies. The company’s Digital Solutions segment provides sensor-based measurement, non-destructive testing and inspection, turbine, generator and plant controls, and condition monitoring, as well as pipeline integrity solutions for a range of industries, including oil and gas, power generation, aerospace, metals, and transportation. It serves through direct and indirect channels. The company is based in Houston, Texas. Baker Hughes, a GE company is a subsidiary of General Electric Company.



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