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. BKR has an excellent profitability rating, but there are some minor concerns on its financial health. BKR is quite expensive at the moment. It does show a decent growth rate. Finally BKR also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year BKR was profitable.
BKR had a positive operating cash flow in the past year.
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
BKR has a better Return On Assets (7.68%) than 70.97% of its industry peers.
The Return On Equity of BKR (17.01%) is better than 82.26% of its industry peers.
The Return On Invested Capital of BKR (11.56%) is better than 80.65% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BKR is in line with the industry average of 8.69%.
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
With a decent Profit Margin value of 10.51%, BKR is doing good in the industry, outperforming 74.19% of the companies in the same industry.
In the last couple of years the Profit Margin of BKR has grown nicely.
BKR has a Operating Margin of 12.74%. This is in the better half of the industry: BKR outperforms 67.74% of its industry peers.
BKR's Operating Margin has improved in the last couple of years.
The Gross Margin of BKR (21.95%) is worse than 66.13% of its industry peers.
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
BKR has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
BKR has less shares outstanding than it did 1 year ago.
The number of shares outstanding for BKR has been increased compared to 5 years ago.
BKR has a better debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of BKR is 2.99, which is a good value as it means it would take BKR, 2.99 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.99, BKR is in the better half of the industry, outperforming 66.13% of the companies in the same industry.
BKR has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
BKR has a Debt to Equity ratio (0.35) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 2.99 | ||
| Altman-Z | N/A |
ROIC/WACC1.27
WACC9.13%
2.3 Liquidity
BKR has a Current Ratio of 1.34. 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 1.34, BKR is doing worse than 80.65% of the companies in the same industry.
BKR has a Quick Ratio of 1.34. This is a bad value and indicates that BKR is not financially healthy enough and could expect problems in meeting its short term obligations.
BKR's Quick ratio of 0.93 is on the low side compared to the rest of the industry. BKR is outperformed by 82.26% 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.
BKR shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 23.35% yearly.
The Revenue has been growing slightly by 6.22% in the past year.
Measured over the past years, BKR shows a small growth in Revenue. The Revenue has been growing by 3.14% on average per year.
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 Y2.51%
EPS Next 2Y7.97%
EPS Next 3Y8.67%
EPS Next 5Y8.14%
Revenue Next Year-1.9%
Revenue Next 2Y0.75%
Revenue Next 3Y1.35%
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
The Price/Earnings ratio is 14.93, which indicates a correct valuation of BKR.
Compared to the rest of the industry, the Price/Earnings ratio of BKR is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 26.03, BKR is valued a bit cheaper.
A Price/Forward Earnings ratio of 13.24 indicates a correct 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 21.94. BKR is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.93 | ||
| Fwd PE | 13.24 |
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 77.42% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BKR is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.02 | ||
| EV/EBITDA | 8.34 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates BKR does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of BKR may justify a higher PE ratio.
PEG (NY)5.95
PEG (5Y)0.64
EPS Next 2Y7.97%
EPS Next 3Y8.67%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.44%, BKR has a reasonable but not impressive dividend return.
BKR's Dividend Yield is a higher than the industry average which is at 3.93.
BKR's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
5.2 History
The dividend of BKR has a limited annual growth rate of 4.36%.
BKR has paid a dividend for at least 10 years, which is 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 2Y7.97%
EPS Next 3Y8.67%
36.59
-0.06 (-0.16%)
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 Change23.45%
Market Cap36.25B
Analysts81.33
Price Target48.76 (33.26%)
Short Float %2.77%
Short Ratio3.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
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)8.24%
Min EPS beat(2)5.87%
Max EPS beat(2)10.6%
EPS beat(4)4
Avg EPS beat(4)10.17%
Min EPS beat(4)5.87%
Max EPS beat(4)14.99%
EPS beat(8)8
Avg EPS beat(8)9.27%
EPS beat(12)10
Avg EPS beat(12)2.55%
EPS beat(16)10
Avg EPS beat(16)-4.23%
Revenue beat(2)1
Avg Revenue beat(2)0.51%
Min Revenue beat(2)-1.98%
Max Revenue beat(2)3.01%
Revenue beat(4)2
Avg Revenue beat(4)-0.08%
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)-1.23%
PT rev (1m)-7.62%
PT rev (3m)-0.13%
EPS NQ rev (1m)-7.28%
EPS NQ rev (3m)-8.03%
EPS NY rev (1m)-6.05%
EPS NY rev (3m)-8.02%
Revenue NQ rev (1m)-3.43%
Revenue NQ rev (3m)-3.67%
Revenue NY rev (1m)-2.54%
Revenue NY rev (3m)-3.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.93 | ||
| Fwd PE | 13.24 | ||
| P/S | 1.3 | ||
| P/FCF | 18.02 | ||
| P/OCF | 11.13 | ||
| P/B | 2.11 | ||
| P/tB | 5.07 | ||
| EV/EBITDA | 8.34 |
EPS(TTM)2.45
EY6.7%
EPS(NY)2.76
Fwd EY7.55%
FCF(TTM)2.03
FCFY5.55%
OCF(TTM)3.29
OCFY8.98%
SpS28.1
BVpS17.37
TBVpS7.22
PEG (NY)5.95
PEG (5Y)0.64
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
WACC9.13%
ROIC/WACC1.27
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 Y2.51%
EPS Next 2Y7.97%
EPS Next 3Y8.67%
EPS Next 5Y8.14%
Revenue 1Y (TTM)6.22%
Revenue growth 3Y10.72%
Revenue growth 5Y3.14%
Sales Q2Q%0.14%
Revenue Next Year-1.9%
Revenue Next 2Y0.75%
Revenue Next 3Y1.35%
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%