BAKER HUGHES CO (BKR)

US05722G1004 - Common Stock

29.96  +0.37 (+1.25%)

After market: 29.95 -0.01 (-0.03%)

Fundamental Rating

5

Overall BKR gets a fundamental rating of 5 out of 10. We evaluated BKR against 66 industry peers in the Energy Equipment & Services industry. BKR has an average financial health and profitability rating. BKR has a correct valuation and a medium growth rate. Finally BKR also has an excellent dividend rating.



6

1. Profitability

1.1 Basic Checks

BKR had positive earnings in the past year.
In the past year BKR had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: BKR reported negative net income in multiple years.
Each year in the past 5 years BKR had a positive operating cash flow.

1.2 Ratios

With a decent Return On Assets value of 5.26%, BKR is doing good in the industry, outperforming 60.61% of the companies in the same industry.
The Return On Equity of BKR (12.65%) is better than 65.15% of its industry peers.
BKR has a Return On Invested Capital of 8.82%. This is comparable to the rest of the industry: BKR outperforms 59.09% of its industry peers.
BKR had an Average Return On Invested Capital over the past 3 years of 6.72%. This is below the industry average of 9.12%.
The 3 year average ROIC (6.72%) for BKR is below the current ROIC(8.82%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 5.26%
ROE 12.65%
ROIC 8.82%
ROA(3y)0.96%
ROA(5y)-4.61%
ROE(3y)2.38%
ROE(5y)-9.47%
ROIC(3y)6.72%
ROIC(5y)5.04%

1.3 Margins

With a decent Profit Margin value of 7.62%, BKR is doing good in the industry, outperforming 63.64% of the companies in the same industry.
BKR's Profit Margin has improved in the last couple of years.
The Operating Margin of BKR (10.48%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of BKR has grown nicely.
Looking at the Gross Margin, with a value of 20.72%, BKR is doing worse than 66.67% of the companies in the same industry.
BKR's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 10.48%
PM (TTM) 7.62%
GM 20.72%
OM growth 3Y39.79%
OM growth 5Y13.27%
PM growth 3YN/A
PM growth 5Y54.97%
GM growth 3Y10.28%
GM growth 5Y3.53%

4

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
Compared to 5 years ago, BKR has more shares outstanding
The debt/assets ratio for BKR has been reduced compared to a year ago.

2.2 Solvency

Based on the Altman-Z score of 1.54, we must say that BKR is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of BKR (1.54) is comparable to the rest of the industry.
The Debt to FCF ratio of BKR is 3.28, which is a good value as it means it would take BKR, 3.28 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 3.28, BKR is doing good in the industry, outperforming 63.64% of the companies in the same industry.
BKR has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.38, BKR is in line with its industry, outperforming 48.48% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.38
Debt/FCF 3.28
Altman-Z 1.54
ROIC/WACC1.1
WACC8.03%

2.3 Liquidity

BKR has a Current Ratio of 1.25. This is a normal value and indicates that BKR is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.25, BKR is doing worse than 83.33% of the companies in the same industry.
A Quick Ratio of 0.86 indicates that BKR may have some problems paying its short term obligations.
The Quick ratio of BKR (0.86) is worse than 89.39% of its industry peers.
Industry RankSector Rank
Current Ratio 1.25
Quick Ratio 0.86

6

3. Growth

3.1 Past

BKR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 77.78%, which is quite impressive.
BKR shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.02% yearly.
BKR shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.57%.
BKR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.20% yearly.
EPS 1Y (TTM)77.78%
EPS 3Y276.41%
EPS 5Y19.02%
EPS growth Q2Q34.21%
Revenue 1Y (TTM)20.57%
Revenue growth 3Y7.2%
Revenue growth 5Y2.2%
Revenue growth Q2Q15.75%

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 12.23% on average per year.
The Revenue is expected to grow by 4.96% on average over the next years.
EPS Next Y27.84%
EPS Next 2Y26.19%
EPS Next 3Y25.35%
EPS Next 5Y12.23%
Revenue Next Year8.41%
Revenue Next 2Y7.61%
Revenue Next 3Y6.49%
Revenue Next 5Y4.96%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

5

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 18.72, BKR is valued on the expensive side.
BKR's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of BKR to the average of the S&P500 Index (26.31), we can say BKR is valued slightly cheaper.
BKR is valuated correctly with a Price/Forward Earnings ratio of 14.65.
The rest of the industry has a similar Price/Forward Earnings ratio as BKR.
The average S&P500 Price/Forward Earnings ratio is at 21.87. BKR is valued slightly cheaper when compared to this.
Industry RankSector Rank
PE 18.72
Fwd PE 14.65

4.2 Price Multiples

BKR's Enterprise Value to EBITDA ratio is in line with the industry average.
BKR's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 16.31
EV/EBITDA 8.55

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of BKR may justify a higher PE ratio.
BKR's earnings are expected to grow with 25.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.67
PEG (5Y)0.98
EPS Next 2Y26.19%
EPS Next 3Y25.35%

7

5. Dividend

5.1 Amount

BKR has a Yearly Dividend Yield of 2.84%.
Compared to an average industry Dividend Yield of 2.68, BKR pays a better dividend. On top of this BKR pays more dividend than 87.88% of the companies listed in the same industry.
BKR's Dividend Yield is comparable with the S&P500 average which is at 2.44.
Industry RankSector Rank
Dividend Yield 2.84%

5.2 History

The dividend of BKR has a limited annual growth rate of 3.09%.
BKR has been paying a dividend for at least 10 years, so it has a reliable track record.
BKR has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.09%
Div Incr Years2
Div Non Decr Years19

5.3 Sustainability

40.43% of the earnings are spent on dividend by BKR. This is a bit on the high side, but may be sustainable.
The dividend of BKR is growing, but earnings are growing more, so the dividend growth is sustainable.
DP40.43%
EPS Next 2Y26.19%
EPS Next 3Y25.35%

BAKER HUGHES CO

NASDAQ:BKR (3/1/2024, 7:04:24 PM)

After market: 29.95 -0.01 (-0.03%)

29.96

+0.37 (+1.25%)

Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap29.99B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 2.84%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 18.72
Fwd PE 14.65
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.67
PEG (5Y)0.98
Profitability
Industry RankSector Rank
ROA 5.26%
ROE 12.65%
ROCE
ROIC
ROICexc
ROICexgc
OM 10.48%
PM (TTM) 7.62%
GM 20.72%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.69
Health
Industry RankSector Rank
Debt/Equity 0.38
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.25
Quick Ratio 0.86
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)77.78%
EPS 3Y276.41%
EPS 5Y
EPS growth Q2Q
EPS Next Y27.84%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)20.57%
Revenue growth 3Y7.2%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y