BAKER HUGHES CO (NASDAQ:BKR) emerged from our Peter Lynch-inspired screen as a potential fit for investors seeking growth at a reasonable price (GARP). The company, a provider of oilfield services and energy technology solutions, meets several key criteria for sustainable long-term growth while maintaining 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.
Attractive Valuation: With a PEG ratio of 0.68 (below Lynch’s 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%, well above the 15% minimum Lynch favored, reflecting efficient use of shareholder capital.
Conservative Debt Levels: A debt-to-equity ratio of 0.35 suggests a balanced capital structure, aligning with Lynch’s preference for companies with limited leverage.
Solid Liquidity: A current ratio of 1.34 indicates sufficient short-term financial flexibility.