BAKER HUGHES CO (BKR) Stock Fundamental Analysis
NASDAQ:BKR - Nasdaq - US05722G1004 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to BKR. BKR was compared to 62 industry peers in the Energy Equipment & Services industry. While BKR has a great profitability rating, there are some minor concerns on its financial health. BKR is not valued too expensively and it also shows a decent growth rate. BKR also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year BKR was profitable.
In the past year BKR had a positive cash flow from operations.
In multiple years BKR reported negative net income over the last 5 years.
BKR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 7.68%, BKR is doing good in the industry, outperforming 70.97% of the companies in the same industry.
BKR has a better Return On Equity (17.01%) than 79.03% of its industry peers.
BKR has a Return On Invested Capital of 11.56%. This is amongst the best in the industry. BKR outperforms 82.26% of its industry peers.
BKR had an Average Return On Invested Capital over the past 3 years of 9.18%. This is in line with the industry average of 8.27%.
The 3 year average ROIC (9.18%) for BKR is below the current ROIC(11.56%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.68% | ||
| ROE | 17.01% | ||
| ROIC | 11.56% |
ROA(3y)3.76%
ROA(5y)-3.1%
ROE(3y)8.7%
ROE(5y)-6.02%
ROIC(3y)9.18%
ROIC(5y)6.97%
1.3 Margins
BKR has a Profit Margin of 10.51%. This is in the better half of the industry: BKR outperforms 72.58% of its industry peers.
In the last couple of years the Profit Margin of BKR has grown nicely.
BKR's Operating Margin of 12.74% is fine compared to the rest of the industry. BKR outperforms 62.90% of its industry peers.
In the last couple of years the Operating Margin of BKR has grown nicely.
With a Gross Margin value of 21.95%, BKR is not doing good in the industry: 64.52% of the companies in the same industry are doing better.
BKR's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.74% | ||
| PM (TTM) | 10.51% | ||
| GM | 21.95% |
OM growth 3Y17.25%
OM growth 5Y13.35%
PM growth 3YN/A
PM growth 5Y81.94%
GM growth 3Y2.47%
GM growth 5Y2.69%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so BKR is still creating some value.
Compared to 1 year ago, BKR has less shares outstanding
The number of shares outstanding for BKR has been increased compared to 5 years ago.
The debt/assets ratio for BKR has been reduced compared to a year ago.
2.2 Solvency
BKR has a debt to FCF ratio of 2.99. This is a good value and a sign of high solvency as BKR would need 2.99 years to pay back of all of its debts.
BKR has a Debt to FCF ratio of 2.99. This is in the better half of the industry: BKR outperforms 64.52% of its industry peers.
BKR has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
BKR's Debt to Equity ratio of 0.35 is in line compared to the rest of the industry. BKR outperforms 54.84% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 2.99 | ||
| Altman-Z | N/A |
ROIC/WACC1.34
WACC8.65%
2.3 Liquidity
A Current Ratio of 1.34 indicates that BKR should not have too much problems paying its short term obligations.
BKR has a worse Current ratio (1.34) than 77.42% of its industry peers.
A Quick Ratio of 0.93 indicates that BKR may have some problems paying its short term obligations.
The Quick ratio of BKR (0.93) is worse than 80.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.93 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 40.00% over the past year.
The Earnings Per Share has been growing by 23.35% on average over the past years. This is a very strong growth
Looking at the last year, BKR shows a small growth in Revenue. The Revenue has grown by 6.22% in the last year.
BKR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.14% yearly.
EPS 1Y (TTM)40%
EPS 3Y55.53%
EPS 5Y23.35%
EPS Q2Q%18.6%
Revenue 1Y (TTM)6.22%
Revenue growth 3Y10.72%
Revenue growth 5Y3.14%
Sales Q2Q%0.14%
3.2 Future
Based on estimates for the next years, BKR will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.14% on average per year.
The Revenue is expected to grow by 2.05% on average over the next years.
EPS Next Y9.11%
EPS Next 2Y12.15%
EPS Next 3Y11.89%
EPS Next 5Y8.14%
Revenue Next Year0.46%
Revenue Next 2Y1.96%
Revenue Next 3Y2.22%
Revenue Next 5Y2.05%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 14.45, the valuation of BKR can be described as correct.
BKR's Price/Earnings ratio is in line with the industry average.
BKR's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.88.
The Price/Forward Earnings ratio is 11.88, which indicates a very decent valuation of BKR.
BKR's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.20. BKR is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.45 | ||
| Fwd PE | 11.88 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BKR indicates a slightly more expensive valuation: BKR is more expensive than 79.03% of the companies listed in the same industry.
BKR's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.42 | ||
| EV/EBITDA | 8.07 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
BKR has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.59
PEG (5Y)0.62
EPS Next 2Y12.15%
EPS Next 3Y11.89%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.56%, BKR has a reasonable but not impressive dividend return.
The stock price of BKR dropped by -23.34% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
BKR's Dividend Yield is a higher than the industry average which is at 3.32.
Compared to an average S&P500 Dividend Yield of 2.45, BKR has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
5.2 History
The dividend of BKR has a limited annual growth rate of 4.36%.
BKR has been paying a dividend for at least 10 years, so it has a reliable track record.
BKR has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.36%
Div Incr Years3
Div Non Decr Years10
5.3 Sustainability
29.22% of the earnings are spent on dividend by BKR. This is a low number and sustainable payout ratio.
The dividend of BKR is growing, but earnings are growing more, so the dividend growth is sustainable.
DP29.22%
EPS Next 2Y12.15%
EPS Next 3Y11.89%
35.4
-0.52 (-1.45%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners97.98%
Inst Owner Change0%
Ins Owners0.12%
Ins Owner Change25.04%
Market Cap35.06B
Analysts80.67
Price Target50.43 (42.46%)
Short Float %2.82%
Short Ratio3.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
Yearly Dividend0.84
Dividend Growth(5Y)4.36%
DP29.22%
Div Incr Years3
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.18%
Min EPS beat(2)5.75%
Max EPS beat(2)10.6%
EPS beat(4)4
Avg EPS beat(4)10.14%
Min EPS beat(4)5.75%
Max EPS beat(4)14.99%
EPS beat(8)8
Avg EPS beat(8)9.26%
EPS beat(12)10
Avg EPS beat(12)2.54%
EPS beat(16)10
Avg EPS beat(16)-4.23%
Revenue beat(2)1
Avg Revenue beat(2)0.49%
Min Revenue beat(2)-2.03%
Max Revenue beat(2)3.01%
Revenue beat(4)2
Avg Revenue beat(4)-0.09%
Min Revenue beat(4)-5.23%
Max Revenue beat(4)3.87%
Revenue beat(8)3
Avg Revenue beat(8)-0.27%
Revenue beat(12)4
Avg Revenue beat(12)-0.97%
Revenue beat(16)5
Avg Revenue beat(16)-1.24%
PT rev (1m)-5.24%
PT rev (3m)5.79%
EPS NQ rev (1m)-0.45%
EPS NQ rev (3m)-3.37%
EPS NY rev (1m)-1.2%
EPS NY rev (3m)-0.18%
Revenue NQ rev (1m)-0.24%
Revenue NQ rev (3m)-2.32%
Revenue NY rev (1m)-0.89%
Revenue NY rev (3m)-1.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.45 | ||
| Fwd PE | 11.88 | ||
| P/S | 1.26 | ||
| P/FCF | 17.42 | ||
| P/OCF | 10.76 | ||
| P/B | 2.04 | ||
| P/tB | 4.9 | ||
| EV/EBITDA | 8.07 |
EPS(TTM)2.45
EY6.92%
EPS(NY)2.98
Fwd EY8.42%
FCF(TTM)2.03
FCFY5.74%
OCF(TTM)3.29
OCFY9.29%
SpS28.11
BVpS17.37
TBVpS7.22
PEG (NY)1.59
PEG (5Y)0.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.68% | ||
| ROE | 17.01% | ||
| ROCE | 13.9% | ||
| ROIC | 11.56% | ||
| ROICexc | 13.26% | ||
| ROICexgc | 24.21% | ||
| OM | 12.74% | ||
| PM (TTM) | 10.51% | ||
| GM | 21.95% | ||
| FCFM | 7.23% |
ROA(3y)3.76%
ROA(5y)-3.1%
ROE(3y)8.7%
ROE(5y)-6.02%
ROIC(3y)9.18%
ROIC(5y)6.97%
ROICexc(3y)10.7%
ROICexc(5y)8.19%
ROICexgc(3y)20.8%
ROICexgc(5y)15.76%
ROCE(3y)11.03%
ROCE(5y)8.4%
ROICexcg growth 3Y28.92%
ROICexcg growth 5Y22.28%
ROICexc growth 3Y29.47%
ROICexc growth 5Y32.66%
OM growth 3Y17.25%
OM growth 5Y13.35%
PM growth 3YN/A
PM growth 5Y81.94%
GM growth 3Y2.47%
GM growth 5Y2.69%
F-Score9
Asset Turnover0.73
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 2.99 | ||
| Debt/EBITDA | 1.27 | ||
| Cap/Depr | 109.4% | ||
| Cap/Sales | 4.47% | ||
| Interest Coverage | 11.82 | ||
| Cash Conversion | 69.52% | ||
| Profit Quality | 68.76% | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.93 | ||
| Altman-Z | N/A |
F-Score9
WACC8.65%
ROIC/WACC1.34
Cap/Depr(3y)106.11%
Cap/Depr(5y)93.95%
Cap/Sales(3y)4.69%
Cap/Sales(5y)4.59%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)40%
EPS 3Y55.53%
EPS 5Y23.35%
EPS Q2Q%18.6%
EPS Next Y9.11%
EPS Next 2Y12.15%
EPS Next 3Y11.89%
EPS Next 5Y8.14%
Revenue 1Y (TTM)6.22%
Revenue growth 3Y10.72%
Revenue growth 5Y3.14%
Sales Q2Q%0.14%
Revenue Next Year0.46%
Revenue Next 2Y1.96%
Revenue Next 3Y2.22%
Revenue Next 5Y2.05%
EBIT growth 1Y25.69%
EBIT growth 3Y29.82%
EBIT growth 5Y16.91%
EBIT Next Year44.98%
EBIT Next 3Y19.23%
EBIT Next 5Y11.81%
FCF growth 1Y61.48%
FCF growth 3Y10.61%
FCF growth 5Y18.31%
OCF growth 1Y43.04%
OCF growth 3Y11.96%
OCF growth 5Y9.4%