In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Baker Hughes BKR in comparison to its major competitors within the Energy Equipment & Services industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.
Baker Hughes Background
Baker Hughes is a global leader in oilfield services and oilfield equipment, with particularly strong presences in the artificial lift, specialty chemicals, and completions markets. It maintains modest exposure to offshore oil and gas production. The other half of its business focuses on industrial power generation, process solutions, and industrial asset management, with high exposure to the liquid natural gas market specifically, as well as broader industrials end markets.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Baker Hughes Co | 30.57 | 2.35 | 1.52 | 2.75% | $0.95 | $1.31 | 25.12% |
| SLB | 21.78 | 4.54 | 2.75 | 5.63% | $1.98 | $1.6 | 19.58% |
| Halliburton Co | 15.63 | 4.38 | 1.72 | 7.13% | $1.15 | $1.08 | 14.27% |
| Tenaris SA | 5.37 | 1.26 | 1.33 | 7.32% | $1.58 | $1.81 | 45.51% |
| NOV Inc | 19.52 | 1.49 | 1.01 | 2.9% | $0.27 | $0.46 | 21.19% |
| Weatherford International PLC | 27.27 | 10.70 | 1.44 | 13.53% | $0.2 | $0.43 | 19.74% |
| ChampionX Corp | 27.31 | 3.82 | 1.76 | 5.6% | $0.18 | $0.28 | -0.64% |
| Tidewater Inc | 63.26 | 3.95 | 4.20 | 2.56% | $0.06 | $0.06 | 31.52% |
| Liberty Energy Inc | 5.68 | 1.94 | 0.72 | 9.35% | $0.31 | $0.26 | 26.77% |
| Cactus Inc | 24.07 | 4.17 | 4.22 | 3.3% | $0.09 | $0.1 | 79.67% |
| Oceaneering International Inc | 40 | 4.73 | 1.18 | 3.57% | $0.07 | $0.1 | 14.1% |
| USA Compression Partners LP | 861.67 | 9.44 | 3.30 | 3.94% | $0.13 | $0.08 | 20.68% |
| Archrock Inc | 30.86 | 2.37 | 2.19 | 2.84% | $0.11 | $0.09 | 14.69% |
| RPC Inc | 6.55 | 1.94 | 1.03 | 6.68% | $0.11 | $0.12 | 10.75% |
| ProFrac Holding Corp | 2.49 | 1.18 | 0.09 | -0.41% | $0.15 | $0.13 | 20.24% |
| Kodiak Gas Services Inc | 24.87 | 7.03 | 1.80 | 2.73% | $0.13 | $0.12 | 14.76% |
| ProPetro Holding Corp | 12.80 | 1.16 | 0.76 | 3.94% | $0.11 | $0.08 | 38.14% |
| Atlas Energy Solutions Inc | 23.76 | 15.20 | 1.90 | 57.86% | $0.09 | $0.09 | 23.2% |
| US Silica Holdings Inc | 6.79 | 1.32 | 0.62 | 6.08% | $0.12 | $0.15 | 4.7% |
| Dril-Quip Inc | 43.15 | 1.01 | 2.44 | 0.4% | $0.01 | $0.02 | -4.65% |
| Tetra Technologies Inc | 35.33 | 5.96 | 1.37 | 14.25% | $0.04 | $0.05 | 24.69% |
| Select Water Solutions Inc | 12.44 | 1.06 | 0.56 | 2.66% | $0.06 | $0.06 | 20.46% |
| Bristow Group Inc | 48.67 | 0.96 | 0.66 | -0.2% | $0.02 | $0.21 | 5.85% |
| Average | 61.78 | 4.07 | 1.68 | 7.35% | $0.32 | $0.34 | 21.15% |
Upon closer analysis of Baker Hughes, the following trends become apparent:
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The stock's Price to Earnings ratio of 30.57 is lower than the industry average by 0.49x, suggesting potential value in the eyes of market participants.
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The current Price to Book ratio of 2.35, which is 0.58x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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With a relatively low Price to Sales ratio of 1.52, which is 0.9x the industry average, the stock might be considered undervalued based on sales performance.
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With a Return on Equity (ROE) of 2.75% that is 4.6% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $950 Million, which is 2.97x above the industry average, indicating stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $1.31 Billion, which indicates 3.85x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 25.12%, outperforming the industry average of 21.15%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In light of the Debt-to-Equity ratio, a comparison between Baker Hughes and its top 4 peers reveals the following information:
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When comparing the debt-to-equity ratio, Baker Hughes is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.44.
Key Takeaways
Baker Hughes has a low PE ratio, indicating that its stock price is relatively low compared to its earnings. The low PB ratio suggests that the company's stock is undervalued based on its book value. Similarly, the low PS ratio indicates that the stock is trading at a lower price compared to its sales. On the other hand, Baker Hughes has high ROE, EBITDA, gross profit, and revenue growth, indicating strong financial performance compared to its peers in the Energy Equipment & Services industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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