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In-Depth Analysis: Baker Hughes Versus Competitors In Energy Equipment & Services Industry

Published Nov 14, 2023 16:00 Updated Nov 14, 2023 17:11
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© Reuters. In-Depth Analysis: Baker Hughes Versus Competitors In Energy Equipment & Services Industry
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Benzinga - by Benzinga Insights, Benzinga Staff Writer.

In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Baker Hughes (NASDAQ:BKR) in relation to its major competitors in the Energy Equipment & Services industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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.

CompanyP/EP/BP/SROEEBITDA (in billions)Gross Profit (in billions)Revenue Growth
Baker Hughes Co 20.64 2.27 1.42 3.41% $1.08 $1.34 23.69%
SLB 18.75 3.98 2.43 5.91% $2.1 $1.72 11.14%
Halliburton Co 13.29 3.78 1.53 8.03% $1.26 $1.12 8.34%
Tenaris SA 5.72 1.26 1.36 3.37% $0.98 $1.26 8.84%
NOV Inc 15.46 1.39 0.93 2.08% $0.26 $0.47 15.67%
Weatherford International PLC 20.29 9.41 1.42 17.74% $0.3 $0.45 17.23%
ChampionX Corp 19.34 3.30 1.55 4.5% $0.19 $0.29 -8.01%
Liberty Energy Inc 5.64 1.82 0.71 8.58% $0.31 $0.26 2.33%
Tidewater Inc 43.31 3.10 3.50 2.72% $0.1 $0.08 56.06%
USA Compression Partners LP 174.80 11.37 3.21 3.52% $0.13 $0.08 20.86%
Oceaneering International Inc 28.76 3.84 0.95 5.36% $0.09 $0.11 13.49%
Archrock Inc 26.06 2.50 2.24 3.54% $0.11 $0.1 18.58%
RPC Inc 6.75 1.62 0.94 1.82% $0.05 $0.06 -28.11%
Helix Energy Solutions Group Inc 74.38 0.95 1.19 1.01% $0.07 $0.08 45.17%
Kodiak Gas Services Inc 45.16 1.17 1.71 2.73% $0.13 $0.12 14.76%
ProFrac Holding Corp 12.13 1.08 0.30 -1.94% $0.13 $0.09 -17.58%
ProPetro Holding Corp 9.13 1.01 0.66 3.41% $0.1 $0.08 27.26%
Atlas Energy Solutions Inc 20.59 13.17 1.65 57.86% $0.09 $0.09 23.2%
US Silica Holdings Inc 5.73 1.03 0.53 3.35% $0.1 $0.13 -12.38%
Select Water Solutions Inc 14.15 1.01 0.55 1.91% $0.05 $0.06 3.79%
Bristow Group Inc 47.37 0.96 0.64 0.54% $0.06 $0.23 10.03%
Tetra Technologies Inc 22.95 4.40 1.01 14.25% $0.04 $0.05 24.69%
Newpark Resources Inc 26.07 1.45 0.78 1.85% $0.02 $0.04 -9.71%
Average 29.81 3.35 1.35 6.92% $0.3 $0.32 11.17%
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.dividend-frequency { font-size: 12px; color: #6c757d; } By conducting an in-depth analysis of Baker Hughes, we can identify the following trends:

  • A Price to Earnings ratio of 20.64 significantly below the industry average by 0.69x suggests undervaluation. This can make the stock appealing for those seeking growth.

  • With a Price to Book ratio of 2.27, significantly falling below the industry average by 0.68x, it suggests undervaluation and the possibility of untapped growth prospects.

  • The stock's relatively high Price to Sales ratio of 1.42, surpassing the industry average by 1.05x, may indicate an aspect of overvaluation in terms of sales performance.

  • The company has a lower Return on Equity (ROE) of 3.41%, which is 3.51% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.

  • The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.08 Billion, which is 3.6x above the industry average, implying stronger profitability and robust cash flow generation.

  • The gross profit of $1.34 Billion is 4.19x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

  • With a revenue growth of 23.69%, which surpasses the industry average of 11.17%, the company is demonstrating robust sales expansion and gaining market share.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.

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 terms of the Debt-to-Equity ratio, Baker Hughes stands in comparison with its top 4 peers, leading to the following comparisons:

  • Baker Hughes is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.44.

  • This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.

Key Takeaways Baker Hughes has a low PE ratio compared to its peers in the Energy Equipment & Services industry, indicating that it may be undervalued. The low PB ratio suggests that the company's stock price is also undervalued relative to its book value. However, the high PS ratio implies that the stock may be overvalued based on its sales. The low ROE indicates that the company is not generating significant returns on its shareholders' equity. On the other hand, Baker Hughes has high EBITDA, gross profit, and revenue growth, indicating strong financial performance.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

© 2023 Benzinga does not provide investment advice. All rights reserved.

Read the original article on Benzinga

In-Depth Analysis: Baker Hughes Versus Competitors In Energy Equipment & Services Industry

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