Baker Hughes was formed in 2017 through the combination of General Electric's oil and gas segment and legacy Baker Hughes. While the merger was expensive, it created a global equipment and service powerhouse, supplying multiple solutions across the energy sector and adjacent markets.
Baker Hughes will grow far faster than its oilfield peers. Investors don’t fully appreciate the growth opportunities in its IET portfolio and a potential rerating in a breakup of its segments.
Baker Hughes is priced for perfection; bulls assign it an inflated multiple relative to peers that either is not justified by its returns profile or assumes no midcycle reversion.
|
Metric
|
BKR
|
SLB
|
ENR
|
|---|---|---|---|
Price/Earnings (Normalized) | 24.76 | 21.25 | 64.40 |
Price/Book Value | 3.39 | 3.31 | 12.62 |
Price/Sales | 2.35 | 2.37 | 3.49 |
Price/Cash Flow | 18.90 | 13.00 | 35.92 |
|
Metric
|
BKR
|
SLB
|
ENR
|
|---|---|---|---|
Quick Ratio | 1.60 | 0.86 | 0.62 |
Current Ratio | 2.13 | 1.34 | 0.91 |
Interest Coverage | 14.97 | 8.72 | 12.72 |
|
Metric
|
BKR
|
SLB
|
ENR
|
|---|---|---|---|
Return on Assets (Normalized) | 7.30% | 8.03% | 5.70% |
Return on Equity (Normalized) | 16.66% | 17.88% | 31.32% |
Return on Invested Capital (Normalized) | 12.32% | 12.09% | 22.25% |
|
1-Day Chart
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United States