BAKER HUGHES CO (NASDAQ:BKR) – A Dividend Stock Worth Considering

BAKER HUGHES CO (NASDAQ:BKR) was identified by our Best Dividend screen as a stock with strong dividend qualities, solid profitability, and reasonable financial health. The company operates in the energy sector, providing oilfield services and industrial technology solutions. Below, we examine why BKR stands out for dividend-focused investors.

Dividend Strengths

• Reliable Payout: BKR offers a 2.36% dividend yield, slightly below the industry average but competitive compared to the S&P 500. The company has maintained dividend payments for over 10 years without reductions, indicating stability.
• Sustainable Growth: The dividend has grown at an annualized rate of 4.36%, supported by earnings growth. The payout ratio of 29.22% suggests dividends are well-covered by profits, reducing the risk of cuts.
• Strong Profitability: With a Return on Equity (ROE) of 17.17% and improving margins, BKR generates sufficient earnings to sustain and potentially increase dividends.

Financial Health & Valuation

• Balanced Debt: The company’s Debt-to-Equity ratio of 0.35 is manageable, and its Altman-Z score of 2.07 indicates moderate bankruptcy risk, though liquidity metrics (Current Ratio: 1.34) could be stronger.
• Reasonable Valuation: BKR trades at a P/E of 15.92, below the S&P 500 average, though its PEG ratio suggests growth expectations are modest.

For a deeper dive, review the full fundamental analysis of BKR.

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Disclaimer

This is not investing advice! The observations here are based on data at the time of writing. Always conduct your own research before making investment decisions.