Contrasting Baker Hughes (BKR) & The Competition

Baker Hughes (NASDAQ:BKR) is one of 177 public companies in the “Energy Equipment & Services” industry, but how does it contrast to its peers? We will compare Baker Hughes to related companies based on the strength of its analyst recommendations, profitability, earnings, dividends, institutional ownership, valuation and risk.

Analyst Recommendations

This is a summary of current ratings and target prices for Baker Hughes and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baker Hughes	0	4	16	2	2.91
Baker Hughes Competitors	1663	6811	8599	486	2.45

Baker Hughes currently has a consensus price target of $70.27, suggesting a potential upside of 32.47%. As a group, “Energy Equipment & Services” companies have a potential upside of 28.75%. Given Baker Hughes’ stronger consensus rating and higher probable upside, analysts clearly believe Baker Hughes is more favorable than its peers.

Valuation and Earnings

This table compares Baker Hughes and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Baker Hughes	$28.74 billion	$2.59 billion	18.29
Baker Hughes Competitors	$3.28 billion	$29.73 million	18.75

Baker Hughes has higher revenue and earnings than its peers. Baker Hughes is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Baker Hughes pays an annual dividend of $0.92 per share and has a dividend yield of 1.7%. Baker Hughes pays out 31.7% of its earnings in the form of a dividend. As a group, “Energy Equipment & Services” companies pay a dividend yield of -6.7% and pay out -139.5% of their earnings in the form of a dividend. Baker Hughes has increased its dividend for 4 consecutive years.

Insider and Institutional Ownership

92.1% of Baker Hughes shares are held by institutional investors. Comparatively, 49.0% of shares of all “Energy Equipment & Services” companies are held by institutional investors. 0.2% of Baker Hughes shares are held by insiders. Comparatively, 12.3% of shares of all “Energy Equipment & Services” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Baker Hughes has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, Baker Hughes’ peers have a beta of 0.83, indicating that their average stock price is 17% less volatile than the S&P 500.

Profitability

This table compares Baker Hughes and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baker Hughes	10.08%	13.55%	5.27%
Baker Hughes Competitors	-11.07%	7.51%	1.51%

Summary

Baker Hughes beats its peers on 12 of the 15 factors compared.

About Baker Hughes

Baker Hughes Company provides a portfolio of technologies and services to energy and industrial value chain worldwide. The company operates through Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments. The OFSE segment designs and manufactures products and provides related services, including exploration, appraisal, development, production, rejuvenation, and decommissioning for onshore and offshore oilfield operations. This segment also provides drilling services, drill bits, and drilling and completions fluids; completions, intervention, measurements, pressure pumping, and wireline services; artificial lift systems, and oilfield and industrial chemicals; subsea projects and services, flexible pipe systems, and surface pressure control systems; and integrated well services and solutions. It serves oil and natural gas companies; the United States and international independent oil and natural gas companies; national or state-owned oil companies; engineering, procurement, and construction contractors; geothermal companies; and other oilfield service companies. The IET segment provides gas technology equipment, including drivers, driven equipment, flow control, and turnkey solutions for the mechanical-drive, compression, and power-generation applications; and energy sectors, such as oil and gas, LNG operations, petrochemical, and carbon solutions. This segment also provides rack-based vibration monitoring equipment and sensors; integrated asset performance management products; inspection services; pumps, valves, and gears; precision sensors and instrumentation, and condition monitoring solutions. It serves upstream, midstream, downstream, onshore, offshore, and small and large scale customers. 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 was incorporated in 2016 and is based in Houston, Texas.