Financial Analysis: Baker Hughes A GE (BHGE) and National-Oilwell Varco (NOV)
Baker Hughes A GE (NYSE: BHGE) and National-Oilwell Varco (NYSE:NOV) 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 dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.
This is a summary of recent ratings and target prices for Baker Hughes A GE and National-Oilwell Varco, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Baker Hughes A GE||0||12||11||0||2.48|
Baker Hughes A GE pays an annual dividend of $0.72 per share and has a dividend yield of 2.1%. National-Oilwell Varco pays an annual dividend of $0.20 per share and has a dividend yield of 0.4%. Baker Hughes A GE pays out 138.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National-Oilwell Varco pays out -47.6% of its earnings in the form of a dividend.
Institutional and Insider Ownership
94.8% of Baker Hughes A GE shares are held by institutional investors. Comparatively, 94.0% of National-Oilwell Varco shares are held by institutional investors. 0.2% of Baker Hughes A GE shares are held by insiders. Comparatively, 0.8% of National-Oilwell Varco shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Baker Hughes A GE and National-Oilwell Varco’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Baker Hughes A GE||-0.37%||0.43%||0.30%|
Volatility and Risk
Baker Hughes A GE has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, National-Oilwell Varco has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.
Valuation & Earnings
This table compares Baker Hughes A GE and National-Oilwell Varco’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Baker Hughes A GE||$17.26 billion||0.81||$36.00 million||$0.52||65.15|
|National-Oilwell Varco||$7.30 billion||2.46||-$237.00 million||($0.42)||-111.98|
Baker Hughes A GE has higher revenue and earnings than National-Oilwell Varco. National-Oilwell Varco 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.
Baker Hughes A GE beats National-Oilwell Varco on 12 of the 16 factors compared between the two stocks.
Baker Hughes A GE Company Profile
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 for onshore and offshore operations. Its Oilfield Equipment segment designs and manufactures onshore and offshore drilling and production systems; equipment for floating production platforms; deepwater drilling equipment; subsea production systems; and flexible pipe products for operating environments. It also provides installation and decommissioning solutions; various services and solutions related to onshore and offshore drilling activities; and services for installation, technical support, and well access to oil and gas field developers, and drilling and oil companies. Its Turbomachinery & Process Solutions segment designs, manufactures, maintains, and upgrades rotating equipment; offers drivers, driven equipment, and flow control systems, as well as turnkey solutions, such as power generation modules, waste heat/energy recovery, energy storage, modularized small and large liquefaction plants, carbon capture, and storage/use facilities solutions; and provides system upgrades and conversion solutions. This segment serves upstream, midstream, downstream, onshore and offshore, industrial, engineering, procurement, and construction companies. Its Digital Solutions segment provides operating technologies; condition monitoring, inspection technologies, measurement, sensing, and pipeline solutions; and software solutions. 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.
National-Oilwell Varco Company Profile
National Oilwell Varco, Inc. designs, manufactures, and sells systems and components used in oil and gas drilling and production; and provides oilfield services to the upstream oil and gas industry worldwide. It operates through three segments: Wellbore Technologies, Completion & Production Solutions, and Rig Technologies. The Wellbore Technologies segment designs, manufactures, rents, and sells various equipment and technologies. This segment also provides solids control and waste management equipment and services, drilling and completion fluids, data acquisition and analytics, water management solutions, managed-pressure-drilling systems, and wellsite logistics solutions; tubular inspection, repair and coating, rope access inspection, and instrumentation services; and power generation equipment, drill and wired pipes, instruments, measuring and monitoring equipment, downhole and fishing tools, hole openers, and drill bits The Completion & Production Solutions segment designs, manufactures, and sells pumping trucks, blenders, sanders, hydration units, injection units, flowline, and manifolds; coiled tubing units, coiled tubing, and wireline units and tools; composite pipe, surface transfer and progressive cavity pumps, and artificial lift systems; and floating production systems and subsea production technologies. The Rig Technologies segment offers land rigs; offshore drilling equipment packages; and drilling rig components It provides substructures, derricks, and masts; cranes; pipe lifting, racking, rotating, and assembly systems; fluid transfer technologies, such as mud pumps; pressure control equipment, including blowout preventers; power transmission systems comprising drives and generators; and rig instrumentation and control systems. This segment also offers spare parts; and repair and rental services, as well as remote equipment monitoring, technical support, field, and training services. The company was founded in 1862 and is based in Houston, Texas.
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