BAKER HUGHES CO (NASDAQ:BKR) - A GARP Candidate Worth Considering

BAKER HUGHES CO (NASDAQ:BKR) emerged from our Peter Lynch-inspired screen as a potential candidate for long-term investors seeking growth at a reasonable price. The company, a provider of oilfield services and energy technology solutions, meets several key criteria for sustainable growth and sound financial health.

Why BKR Fits the GARP Approach

• Strong Earnings Growth: BKR has delivered a 5-year average EPS growth of 23.35%, comfortably within Lynch’s preferred range of 15-30%. This indicates steady, sustainable expansion rather than overheated growth.
• Attractive Valuation: With a PEG ratio (5-year) of 0.67, well below the threshold of 1, the stock appears reasonably priced relative to its growth trajectory.
• Healthy Profitability: The company’s Return on Equity (ROE) stands at 17.17%, exceeding Lynch’s 15% benchmark, reflecting efficient use of shareholder capital.
• Conservative Leverage: A Debt/Equity ratio of 0.35 suggests a balanced capital structure, aligning with Lynch’s preference for low debt.
• Liquidity Check: The Current Ratio of 1.34 indicates sufficient short-term financial flexibility.

Fundamental Snapshot

Our analysis rates BKR 5/10 overall, with strengths in profitability (7/10) and dividends (7/10), though liquidity (4/10) and valuation (3/10) show room for improvement. Key positives include:

• ROE and ROIC above industry averages.
• Stable dividend history with a 10-year track record and a sustainable payout ratio of 29%.
• Improving margins, particularly in operating and profit margins.

For a deeper dive, review the full fundamental report.

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Disclaimer

This is not investing advice. Always conduct your own research before making investment decisions.