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Fundamental analysis: Baker Hughes Company (BKR)

Awarener score: 3.7

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Lacking), the business stability (Excellent) and growth (Very poor), and the company's inclination to return cash to the stockholders (Very poor).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.5

  • Business has been shrinking at a fast pace. It's been encouraging in relation to peer companies.
  • Baker Hughes Company business trend stability is excellent. The higher the stability, the lower the risk. It looks somewhat better than rivals.

Margins score: 3.8

  • BKR profit margins -on goods and services sold- are usually meagre. They stand slightly better than rival companies.
  • Business profit on sales tends to be very poor. It's below average when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually meagre. They remain lacking compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be meagre in relation to total revenues. They're still slightly better than similar companies.
  • Profits -before income taxes- are usually meagre considering total sales, and remain below average when measured against rivals.
  • Total net profit tends to be meagre when confronted to sales. Company stands almost average when measured against comparable firms.

Growth score: 1.4

  • Baker Hughes Company profit -on goods and services sold- has been growing at a very low pace. It's been close to average when compared to competitors.
  • In recent years, the firm hasn't always been able to profit from operations, which has been bottom tier against comparable firms.
  • In past years, the company couldn't always turn a profit -available to repay debt and purchase properties-, which compares last-in-rank when measured against peer enterprises.
  • In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be a disappointment compared to similar stocks.
  • In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
  • In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
  • The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 1.0

  • BKR had still to pay income taxes, even though in recent past years mostly lost money. It's been bottom tier against peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 3.5

  • Baker Hughes Company usually gets low returns on the resources it controls. It proves almost average when measured against peer firms.
  • The company normally gets meagre proceeds -on the resources directly invested in the business-. They remain lacking compared to similar companies.
  • There's usually little profitability -in relation to owned resources-. It ranks below average when measured against competitors.
  • In the past, got low returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's almost average when measured against comparable enterprises.

Usage of Funds score: 5.1

  • BKR usually uses almost no genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is non-significant. It stands almost average when measured against rival firms.
  • The company is usually replacing most of the property, plant, and equipment that gets old, and saving a little funds for something else, which is similar to industry peers.
  • In the past twelve months it paid good dividends, considering the current stock price. It came somewhat better than competitors.
  • Has increased dividend payments in the past years. Business prospects may have improved. The company has behaved in good shape compared to similar firms.
  • The company pays more dividends than genuine funds is usually able to generate, therefore borrowing more funds. Future payments may be at risk, especially if a downturn in business occurs. Sustainability looks worse than most comparable companies.
  • The company has significantly enlarged the pool of investors in previous years, resulting in more mouths feeding on the pie of profits. It remains in a weak position compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
  • The company uses a lot more funds to reward investors than it can genuinely generate, so they're paid out of existing cash or by borrowing money, both of which will eventually reach a limit. Either business improves, or rewards won't keep at current pace. It still looks substantially worse when measured against competitors.

Balance Sheet score: 4.2

  • Baker Hughes Company intangible assets (like brands and goodwill) represent a portion of resources controlled, according to accounting books. There could be difficulties in liquidating them if the company ever gets in financial distress. It happens to be substantially worse when measured against peer companies.
  • The company has more short-term resources than short-term obligations. Liquidity concerns shouldn't be an issue. It turns to be lacking compared to similar firms.
  • Roughly a quarter of resources controlled were provided for with financial debt. Creditors have some claims on the company. It remains somewhat better than rival firms.
  • Controlled resources might be turned into cash and equivalents neither fast nor too slow. Liquidity and risk might be run-of-the-mill. It looks weak when measured against rivals.
  • For every dollar of short-term obligations, the company has roughly another of cash and short-term receivables. It's lacking compared to peer firms.
  • For every dollar of short-term obligations, the company has few cents of cash and equivalents, which is slightly worse than similar enterprises.
  • Usually, sales are on somewhat more than three months credit. It still ranks below average when measured against peers.
  • Normally has approximately three months of sales worth in inventory. It comes up as in a weak position compared to competitors.
  • On average, it takes higher than six months from the purchase to charging customers. It happens to be somewhat worse than peers.
  • On average pays suppliers approximately three months after the purchase. It ranks great when measured against industry peers.
  • The company pays its suppliers four months or more before charging its customers, so there's significant money invested in working capital. It's close to average when compared to similar companies.
  • Has usually been losing money on the business, so net interest expenses must be paid by increasing borrowings, which is unsustainable in the long run. The situation is very risky for both creditors and shareholders, profitability must increase. It stands bottom tier against rival firms.
  • Business has usually been operated at a loss. Unless prospects improve, the company is no position to decrease loans taken levels but by additional shareholders' funding. Profitability must improve. It ranks last-in-rank when measured against comparable enterprises.
  • Revenues are reasonable in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks excellent in relation to similar firms.
  • Resource exploitation is quite good when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still slightly worse than peer companies.

Valuation score: 4.0

  • Baker Hughes Company reported losses, so valuating it in relation to earnings is meaningless. It happens to be almost average when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a weak position compared to peers.
  • In the past twelve months, the company generated some free funds in relation to the stock price, which stands somewhat better than similar companies.
  • In the past years the company barely generated enough genuine funds to cover up for its business needs. Business prospects should improve to be in a better position to reward investors. It's still almost average when measured against industry firms.
  • In the past twelve months, the company has largely enlarged the pool of investors by issuing new shares. Future profits need to be high enough to justify the measure, as the pie of earnings will now be split among a lot more stockholders. It came up in a very weak position compared to peer ventures.
  • The company has barely more debt than cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks somewhat better than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation has been negative, as the company lost money. It ranks below average when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a more than one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks lacking compared to rival firms.
  • The relation between the stock price and accounting book value is somewhat high. It's important both to check this metric through time and to compare it with rival companies. The company remains slightly worse than peer firms.
  • In the past twelve months, the operating business lost some money. It happens to be encouraging in relation to industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a low earnings power ability when measured against the current stock price and financial position. It's still close to average when compared to peer companies.

Total score: 3.6


BKR logos

Company at a glance: Baker Hughes Company (BKR)

Sector, industry: Energy, Oil & Gas Equipment & Services

Market Cap: 24.15 billions

Revenues TTM: 20.49 billions

Baker Hughes Company provides a portfolio of technologies and services to energy and industrial value chain worldwide. It operates through four segments: Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS), and Digital Solutions (DS). The OFS segment offers exploration, drilling, wireline, evaluation, completion, production, and intervention services; and drilling and completions fluids, wireline services, downhole completion tools and systems, wellbore intervention tools and services, pressure pumping systems, oilfield and industrial chemicals, and artificial lift technologies for oil and natural gas, and oilfield service companies. The OFE segment provides subsea and surface wellheads, pressure control and production systems and services, flexible pipe systems for offshore and onshore applications, and life-of-field solutions, including well intervention and decommissioning solutions; and services related to onshore and offshore drilling and production operations. The TPS segment provides equipment and related services for mechanical-drive, compression, and power-generation applications across the oil and gas industry. Its product portfolio includes drivers, compressors, and turnkey solutions; and pumps, valves, and compressed natural gas and small-scale liquefied natural gas solutions. This segment serves upstream, midstream, downstream, onshore, offshore, and industrial customers. The DS segment provides sensor-based process measurements, machine health and condition monitoring, asset strategy and management, control systems, as well as non-destructive testing and inspection, and pipeline integrity solutions. 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.

Awarener score: 3.7

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Lacking), the business stability (Excellent) and growth (Very poor), and the company's inclination to return cash to the stockholders (Very poor).