NYSE:BKR

Stock Analysis Report

Executive Summary

Baker Hughes Company, an energy technology company, provides a portfolio of technologies and services worldwide.


Snowflake Analysis

Excellent balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Baker Hughes's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BKR has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-6.6%

BKR

-3.4%

US Energy Services

-1.1%

US Market


1 Year Return

-23.3%

BKR

-32.2%

US Energy Services

17.8%

US Market

Return vs Industry: BKR exceeded the US Energy Services industry which returned -32.2% over the past year.

Return vs Market: BKR underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

BKRIndustryMarket
7 Day-6.6%-3.4%-1.1%
30 Day-10.2%-6.9%1.5%
90 Day-9.2%-6.5%6.6%
1 Year-20.8%-23.3%-30.0%-32.2%20.2%17.8%
3 Year-47.2%-65.9%-55.7%-61.3%47.5%38.1%
5 Year-47.8%-67.2%-57.6%-64.8%71.2%52.4%

Price Volatility Vs. Market

How volatile is Baker Hughes's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Baker Hughes undervalued compared to its fair value and its price relative to the market?

89.02x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: BKR ($20.53) is trading above our estimate of fair value ($8.16)

Significantly Below Fair Value: BKR is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: BKR is poor value based on its PE Ratio (89x) compared to the Energy Services industry average (14.2x).

PE vs Market: BKR is poor value based on its PE Ratio (89x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: BKR is poor value based on its PEG Ratio (4.2x)


Price to Book Ratio

PB vs Industry: BKR is overvalued based on its PB Ratio (0.6x) compared to the US Energy Services industry average (0.6x).


Next Steps

Future Growth

How is Baker Hughes forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?

21.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BKR's forecast earnings growth (21.2% per year) is above the savings rate (1.7%).

Earnings vs Market: BKR's earnings (21.2% per year) are forecast to grow faster than the US market (14.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: BKR's revenue (4.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: BKR's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BKR's Return on Equity is forecast to be low in 3 years time (6.3%).


Next Steps

Past Performance

How has Baker Hughes performed over the past 5 years?

-72.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BKR has a large one-off loss of $645.0M impacting its December 31 2019 financial results.

Growing Profit Margin: BKR's current net profit margins (0.5%) are lower than last year (0.9%).


Past Earnings Growth Analysis

Earnings Trend: BKR's earnings have declined by -72.3% per year over the past 5 years.

Accelerating Growth: BKR's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: BKR had negative earnings growth (-34.4%) over the past year, making it difficult to compare to the Energy Services industry average (-32.9%).


Return on Equity

High ROE: BKR's Return on Equity (0.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Baker Hughes's financial position?


Financial Position Analysis

Short Term Liabilities: BKR's short term assets ($15.2B) exceed its short term liabilities ($10.0B).

Long Term Liabilities: BKR's short term assets ($15.2B) exceed its long term liabilities ($8.9B).


Debt to Equity History and Analysis

Debt Level: BKR's debt to equity ratio (19.2%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if BKR's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: BKR's debt is well covered by operating cash flow (32.1%).

Interest Coverage: BKR's interest payments on its debt are well covered by EBIT (6.8x coverage).


Balance Sheet

Inventory Level: BKR has a high level of physical assets or inventory.

Debt Coverage by Assets: BKR's debt is covered by short term assets (assets are 2.3x debt).


Next Steps

Dividend

What is Baker Hughes's current dividend yield, its reliability and sustainability?

3.51%

Current Dividend Yield


Dividend Yield vs Market

company3.5%marketbottom25%1.4%markettop25%3.7%industryaverage4.3%forecastin3Years3.5%

Current dividend yield vs market & industry

Notable Dividend: BKR's dividend (3.51%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: BKR's dividend (3.51%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, BKR has been paying a dividend for less than 10 years.

Growing Dividend: BKR's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (312.2%), BKR's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BKR's dividends in 3 years are forecast to be well covered by earnings (37.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.6yrs

Average board tenure


CEO

Lorenzo Simonelli (46yo)

2.6yrs

Tenure

US$15,959,761

Compensation

Mr. Lorenzo Simonelli has been the Chief Executive Officer, President and Director of Baker Hughes Company (formerly known as Baker Hughes, a GE company) since July 2017 and has been its Chairman of the Bo ...


CEO Compensation Analysis

Compensation vs Market: Lorenzo's total compensation ($USD15.96M) is above average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: Lorenzo's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
Lorenzo Simonelli
Chairman2.6yrsUS$15.96m0.023% $4.9m
Gregory Brenneman
Independent Director2.6yrsUS$292.19k0.016% $3.3m
John Rice
Director2.6yrsUS$261.22k0.0023% $486.8k
Gregory Ebel
Independent Director0.8yrsno data0.0022% $459.3k
Clarence Cazalot
Independent Director2.6yrsUS$297.19k0.0075% $1.6m
William Beattie
Lead Director2.3yrsUS$302.19k0.0019% $402.1k
Lynn Elsenhans
Independent Director2.6yrsUS$307.19k0.0052% $1.1m

2.6yrs

Average Tenure

59yo

Average Age

Experienced Board: BKR's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 30%.


Top Shareholders

Company Information

Baker Hughes Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Baker Hughes Company
  • Ticker: BKR
  • Exchange: NYSE
  • Founded:
  • Industry: Oil and Gas Equipment and Services
  • Sector: Energy
  • Implied Market Cap: US$21.165b
  • Market Cap: US$13.417b
  • Shares outstanding: 1.03b
  • Website: https://www.bakerhughes.com

Number of Employees


Location

  • Baker Hughes Company
  • 17021 Aldine Westfield Road
  • Houston
  • Texas
  • 77073-5101
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BKRNYSE (New York Stock Exchange)YesClass A Common StockUSUSDMar 1964
68VDB (Deutsche Boerse AG)YesClass A Common StockDEEURMar 1964
BKR *BMV (Bolsa Mexicana de Valores)YesClass A Common StockMXMXNMar 1964
0RR8LSE (London Stock Exchange)YesClass A Common StockGBUSDMar 1964
B1KR34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

Biography

Baker Hughes Company, an energy technology company, provides a portfolio of technologies and services worldwide. Its Oilfield Services segment offers drilling, evaluation, completion, production, and intervention services; and directional drilling technology, measurement and logging while drillings, downhole completions tools and systems, wellbore intervention tools and services, wireline services, drilling and completion fluids, oilfield and industrial chemicals, pressure pumping systems, and artificial lift technologies. The company’s Oilfield Equipment segment designs and manufactures products and services, including pressure control equipment and services, subsea production systems and services, drilling equipment, and pipeline systems; and onshore and offshore drilling and production systems, and equipment for floating production platforms, as well as provides a range of services related to onshore and offshore drilling activities. Its Turbomachinery & Process Solutions segment offers equipment and related services for mechanical-drive, compression, and power-generation applications in the oil and gas industry. The Turbomachinery & Process Solutions segment also provides drivers, compressors, and turnkey solutions; and pumps, valves, and compressed natural gas and small-scale liquefied natural gas solutions. This segment serves upstream, midstream, onshore and offshore, and small and large scale companies. The company’s Digital Solutions segment offers sensor-based process measurement, non-destructive testing and inspection, turbine, generator and plant control, and condition monitoring, as well as pipeline integrity solutions for a range of industries, including oil and gas, power generation, aerospace, metals, and transportation. It serves customers through direct and indirect channels. The company was formerly known as Baker Hughes, a GE company and changed its name to Baker Hughes Company in October 2019. Baker Hughes Company is based in Houston, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/24 03:47
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.