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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Baker Hughes Company (XNAS:BKR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
BKR
Name:
BAKER HUGHES COMPANY (XNAS:BKR)
Sector:
- 196000.00K
Industry:
Oil & Gas Equipment & Services
CEO:
Mr. Lorenzo Simonelli
Total Employees:
55,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 22.28% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF BAKER HUGHES COMPANY(BKR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND OIL & GAS EQUIPMENT & SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
25.28
One Month Price Target:
$25.48
Six Month Price Target :
$26.46
Likely Price in One Year's Time:
Ticker:
$27.63
Likely Trading Range Today Under (Normal Volatility)
$25.15
Price Upper limit ($) :
$25.44
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$23.55
This week:
$21.41
This month :
$17.54
Other Primary facts
Market Cap:
25.36B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.02B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
20.58%
-22.26%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$33.31
$29.62
$17.25
$20.94
Medium risk (<10%) entry points
Buy Call
Sell Call
$28.42
Buy Put:
Sell Put:
$27.63
$22.13
$22.93
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
BKR
Sharpe Ratio:
1.89%
Comparison:
BKR, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 25.15% higher than the industry
& is -17.04% lower than the market/S&P 500 average
Average Returns/Yield of
BKR
Daily returns:
0.07%
Weekly returns:
0.36%
Monthly returns:
1.45%
Yearly returns:
19.19%
Comparison of returns:
Average annual returns/yield (last 3 years) is -9.29% below industry average
Classification:
BKR, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.09
Statistical test of Returns:
BKR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.37%
Weekly Volatility:
7.53%
Monthly Volatility:
15.06%
Yearly Volatility:
52.17%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
3.28%
Volatility in last five trading days has been -2.51% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.84%
Weekly VaR:
-15.30%
Monthly VaR:
-30.60%
How Much Can the price of
BKR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-26%
Worst case (decline):
>85%
This translates to price declining to:
$18.65
This translates to price declining to:
$3.79
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
BKR is a 115.99% riskier investment compared to the market/S&P 500 & is 85.04% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -21.51% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
BKR
Beta in relation to market/S&P 500--1.38
Expected beta in 1 year's time:
0.864
Expected beta in 3 year's time:
1.223
Unlevered (debt free) Beta:
1.224
Beta in relation to Nasdaq (XNAS):
0.785
Beta in relation to all global stocks::
0.96
Beta Comparison & Analysis
Beta of competitors/peers::
1.658
Beta is -16.53% lower than peers
Average Industry Beta:
23.957
Beta is -94.22% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.048
Alpha is -103.23% below industry average alpha yield
Alpha is 304% higher than market/& is unsustainably high
Analysis of Cost of Capital of
BKR
Equity cost of capital:
0.126
Equity cost of capital is -92.45% below industry mean WACC
Unlevered (without debt) cost of capital:
11.17%
Before-tax cost of debt:
4.35%
After-tax cost of debt:
3.44%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.44%
WACC is -87.96% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$20.21
Revenue growth rate per share of (3Y):
1.57
Annual revenue growth rate is -141.30% below industry average
EPS:
-
Expected Annual growth rate of EPS (3Y):
-2.99%
Expected future EPS growth rate is -87.49% lower than the Oil & Gas Equipment & Services industry
Free cash flow (FCF) per share:
$1.06
Balance sheet equity growth per share: -41.93%
Equity growth rate per share is -31.32% lower than the industry
Debt per share
$6.53
EBITDA per share
$2.44
Valuation Analysis Today of
BKR
P/E Ratio:
85.29
P/E Ratio of Competitors/Peers:
14.92
P/E ratio is 471.48% higher than main peers & is 235.61% higher than the industry
-
-
Share value as per dividend discount (DDM) model: $12.19
Present value of the expected future dividends only: $5.70
P/S (Price to Sales ratio):
1.25
Price to sales ratio is -17.83% below the industry mean
P/B (Price to book value ratio):
1.57
Price to free cash flow: 23.87
Price to free cash flow ratio is -35.98% lower than the industry
Net income growth rate (3Y):
-170.53%
Net income growth rate is -303.91% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 60.66%
Dividend yeild: 2.85%
Previous Dividend: $0.18
Previous adjusted dividend: $0.18
Previous Dividend: $0.72
-
-
Average dividend payment (long-term): $0.18
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 29/08/2022
Expected next dividend declaration date: 15/08/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 31/05/2022
Previous dividend declaration date: 17/05/2022
Dividend History:
2022-05-27--$0.18
2021-11-01--$0.18
2021-05-24--$0.18
2022-02-04--$0.18
2021-08-09--$0.18
2021-02-08--$0.18
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
42.35%
Net debt to equity ratio:
22.25%
Debt to assets ratio:
19.00%
Net debt to assets ratio:
9.98%
Debt-to-asset ratio is -65.65% below industry average
Ability to repay debt:
Interest coverage ratio:
8.53
Interest coverage ratio is 182.82% more than industry average
Looking forward:
Debt growth rate:
-11.87%
Annual debt growth is -115% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.17%
Analysis of Key Statistics
Correlation of price movement with the market:
0.57
Statistical significance of correlation:
BKR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.416
Stock price is 37.01% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.416
Correlation of price movement with Nasdaq (^IXIC):
0.038
Covariance of price movement with the market:
0.075
Kurtosis
7.209
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.129
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
BKR
Gross Profit Margin Ratio:
81%
Operating Profit Margin Ratio:
6.92%
Operating profit margin is -379.54% lower than the industry
Net Profit Margin Ratio:
81%
Effective Tax Rate:
69.19%
Effective tax rate is 47.72% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
1.94%
Return on equity (ROE) is -105.43% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.87%
Return on assets (ROA) is -118.95% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
1.61
Current ratio is -30.52% below industry average
Cash Conversion Cycle (days):
39.3
Cash conversion cycle is -38.89% below industry average
The remaining useful life of property plant & equipment is: 2.3 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
374.3K
Each employee generates 41% more revenue than industry average revenue per employee
EBITDA generated per employee:
45.1K
Each employee generates 31% more EBITDA than industry average revenue per employee
Profit generated per employee:
5.5K
Each employee generates 8% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 3.6K
Each employee generates -19% less free cash flow than industry average revenue per employee
Assets/Capital per employee
368.9K
Each employee generates -19% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
BKR
OCCIDENTAL PETROLEUM CORPORATION (XNYS:OXY)
HESS CORPORATION (XNYS:HES)
Ecopetrol SA (XNYS:EC)
ETP-PE
ONEOK, INC. (XNYS:OKE)
MPLX COM UNT (XNYS:MPLX)
THE WILLIAMS COMPANIES, INC. (XNYS:WMB)
HALLIBURTON COMPANY (XNYS:HAL)
VALERO ENERGY CORPORATION (XNYS:VLO)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
20.59B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
16.43B
4.16B
-
-
2.50B
-
- 1000.00K
2.50B
-
291.00M
1.09B
2.48B
1.43B
305.00M
1.15B
795.00M
305.00M
Statement of Cash Flow
Date:
Period:
277.00M
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
- 274000.00K
Accounts Receivables:
- 204000.00K
Other Working Capital:
- 181000.00K
Other Non-Cash Items:
- 11000.00K
Net Cash Provided by Operating Activities:
72.00M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
3.19B
-
3.19B
5.74B
4.15B
1.63B
14.71B
4.80B
5.99B
4.12B
-
761.00M
4.62B
20.29B
-
34.99B
3.76B
35.00M
-
3.48B
1.87B
9.14B
6.65B
2.56B
9.41B
-
18.55B
-
- 10088000.00K
- 2559000.0K
-
March 31, 2022 at 6:00:00 AM
18.93B
15.70B
34.25B
-
6.69B
3.5B
-
- 266000.00K
- 266000.00K
- 11000.00K
-
- 236000.00K
- 185000.00K
- 37000.00K
- 469000.00K
1.00M
- 662000.00K
3.19B
3.85B
72.00M
- 268000.00K
- 196000.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
BKR
2023
2024
2025
2026
2027
$20.72
$22.65
$24.76
$27.06
$29.57