Baker Hughes Co (BKR) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B above the industry

Baker Hughes's price-to-book of 2.44 is above the Construction, Mining, and Materials Handling median of 1.38.

Trading above fair value

The share price of $49.41 is above our fair value estimate of $27.84.

Margin of safety under 20%

The price is 77.5% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 9.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 3.7% over the last twelve months; the Construction, Mining, and Materials Handling median is 10.4%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 15.1% over the last twelve months and averaged 8.1% over five years; we look for 15% on both.

Return on invested capital

Needs operating income and invested capital.

Return on equity above the industry

Baker Hughes's return on equity of 15.1% is above the Construction, Mining, and Materials Handling median of 4.5%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 10.1% over the last twelve months, against a 5-year average of 4.7%.

Net margin above the industry

Baker Hughes's net margin of 10.1% is above the Construction, Mining, and Materials Handling median of 2.6%.

High debt

Debt is 90.7% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 59.2% five years ago to 90.7%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 24.7% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.24 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.31; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Baker Hughes paid dividends worth 1.9% of the share price over the last twelve months.

Yield below Treasuries

The 1.9% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Baker Hughes yields 1.9%.

Dividend stability

Fewer than five years of dividend history.

Covered by earnings

Dividends take 31.4% of net income.

Covered by free cash flow

Dividends take 28.2% of free cash flow.