February 15, 2024
Top 10 Stock Baker Hughes Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Baker Hughes – Top 10 Stock in Recycling Leaders
Baker Hughes is listed as a top 10 stock on February 15, 2024 in the market index Recycling because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 89 (top 89% performer), Obermatt assesses an overall strong buy recommendation for Baker Hughes on February 15, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Oil & Gas Equipment |
| Index | Human Rights, Low Waste, Recycling, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Baker Hughes Strong Buy
| 360 METRICS | February 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 68 |
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| SAFETY | ||||||||
| SAFETY | 65 |
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| SENTIMENT | ||||||||
| SENTIMENT | 100 |
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| 360° VIEW | ||||||||
| 360° VIEW | 89 |
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ANALYSIS: With an Obermatt 360° View of 89 (better than 89% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Baker Hughes are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Baker Hughes. The consolidated Growth Rank has a good rank of 68, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 68% of competitors in the same industry. The consolidated Safety Rank at 65 means that the company has a financing structure that is safer than 65% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 100, which means that professional investors are more optimistic about the stock than for 100% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 41, meaning that the share price of Baker Hughes is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 59% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 89, Baker Hughes is better positioned than 89% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 68), a safe financing structure (Safety Rank of 65), and positive professional market sentiment (Sentiment Rank of 100), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Baker Hughes compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (68% better than peers). The value rank could be the reverse reflection of that (32%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Baker Hughes very positive
ANALYSIS: With an Obermatt Sentiment Rank of 100 (better than 100% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Baker Hughes is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Baker Hughes. Analyst Opinions are at a rank of 82 (better than 82% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 79, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Baker Hughes. The Professional Investors rank is 80, which means that currently, professional investors hold more stock in this company than in 80% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 93 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 93% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 100 (more positive than 100% compared with investment alternatives), Baker Hughes has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Baker Hughes stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Baker Hughes Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Baker Hughes shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Baker Hughes. Price-to-Sales (P/S) is 50, which means that the stock price compared with what market professionals expect for future sales is lower than for 50% of comparable companies, indicating a good value concerning Baker Hughes's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 67, which means that dividends are expected to be higher than for 67% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 64% of alternatives (only 36% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 70% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on Baker Hughes's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: Baker Hughes Growth Momentum good
| GROWTH METRICS | February 15, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 63 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 64 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 61 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 57 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 68 |
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ANALYSIS: With an Obermatt Growth Rank of 68 (better than 68% compared with alternatives), Baker Hughes shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Baker Hughes. Sales Growth has a value of 63, which means that, currently, professionals expect the company to grow more than 63% of its competitors. The same is valid for Profit Growth with a value of 64 and for Capital Growth with 61. In addition, Stock Returns had an above-average rank value of 57, which means they have been higher than 57% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 68, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Baker Hughes exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Baker Hughes Debt Financing Safety above-average
| SAFETY METRICS | February 15, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 48 |
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| REFINANCING | ||||||||
| REFINANCING | 57 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 70 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 65 |
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ANALYSIS: With an Obermatt Safety Rank of 65 (better than 65% compared with alternatives), the company Baker Hughes has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Baker Hughes is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Baker Hughes. Refinancing is at 57, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 57% of its competitors. Liquidity is also good at 70, meaning the company generates more profit to service its debt than 70% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 48, which means the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 65 (better than 65% compared with alternatives), Baker Hughes has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Baker Hughes could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Baker Hughes Above-Average Financial Performance
| COMBINED PERFORMANCE | February 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 68 |
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| SAFETY | ||||||||
| SAFETY | 70 |
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| COMBINED | ||||||||
| COMBINED | 67 |
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ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), Baker Hughes (Oil & Gas Equipment, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Baker Hughes are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives). But they show above-average growth (Growth Rank of 68) and are safely financed (Safety Rank of 65, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Baker Hughes's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Baker Hughes exhibits low value (Obermatt Value Rank of 41), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 68). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 65) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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