Baker Hughes (NYSE:BKR) and Baker Hughes A GE (NYSE:BHGE) are both large-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.
Risk & Volatility
Baker Hughes has a beta of 1.78, indicating that its stock price is 78% more volatile than the S&P 500. Comparatively, Baker Hughes A GE has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.
Insider & Institutional Ownership
98.2% of Baker Hughes shares are owned by institutional investors. Comparatively, 48.4% of Baker Hughes A GE shares are owned by institutional investors. 0.2% of Baker Hughes shares are owned by company insiders. Comparatively, 0.2% of Baker Hughes A GE shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Dividends
Baker Hughes pays an annual dividend of $0.72 per share and has a dividend yield of 3.6%. Baker Hughes A GE pays an annual dividend of $0.72 per share and has a dividend yield of 3.6%. Baker Hughes pays out 84.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Baker Hughes A GE pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Baker Hughes and Baker Hughes A GE, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Baker Hughes | 0 | 8 | 13 | 0 | 2.62 |
| Baker Hughes A GE | 0 | 0 | 0 | 0 | N/A |
Baker Hughes presently has a consensus target price of $20.95, indicating a potential upside of 4.28%. Given Baker Hughes' higher probable upside, analysts plainly believe Baker Hughes is more favorable than Baker Hughes A GE.
Profitability
This table compares Baker Hughes and Baker Hughes A GE's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Baker Hughes | -48.86% | 1.12% | 0.59% |
| Baker Hughes A GE | 0.71% | 1.07% | 0.71% |
Valuation & Earnings
This table compares Baker Hughes and Baker Hughes A GE's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Baker Hughes | $23.84 billion | 0.88 | $128 million | $0.85 | 23.64 |
| Baker Hughes A GE | $22.88 billion | 0.91 | $195 million | $0.66 | 30.44 |
Baker Hughes A GE has lower revenue, but higher earnings than Baker Hughes. Baker Hughes is trading at a lower price-to-earnings ratio than Baker Hughes A GE, indicating that it is currently the more affordable of the two stocks.
Summary
Baker Hughes beats Baker Hughes A GE on 8 of the 13 factors compared between the two stocks.
