Baker Hughes Return On Equity vs. Current Valuation

BKR Stock  USD 40.15  0.17  0.42%   
Based on Baker Hughes' profitability indicators, Baker Hughes Co is performing exceptionally good at this time. It has a great probability to showcase excellent profitability results in January. Profitability indicators assess Baker Hughes' ability to earn profits and add value for shareholders.
 
Return On Equity  
First Reported
2010-12-31
Previous Quarter
0.12643155
Current Value
0.13
Quarterly Volatility
0.23030814
 
Credit Downgrade
 
Yuan Drop
 
Covid
As of 12/24/2024, Operating Cash Flow Sales Ratio is likely to grow to 0.13, while Price To Sales Ratio is likely to drop 0.75. At this time, Baker Hughes' Income Before Tax is relatively stable compared to the past year. As of 12/24/2024, Total Other Income Expense Net is likely to grow to about 354.9 M, while Operating Income is likely to drop slightly above 1.2 B.
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.230.2072
Significantly Up
Slightly volatile
For Baker Hughes profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Baker Hughes to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Baker Hughes Co utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Baker Hughes's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Baker Hughes Co over time as well as its relative position and ranking within its peers.
  

Baker Hughes' Revenue Breakdown by Earning Segment

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Is Oil & Gas Equipment & Services space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Baker Hughes. If investors know Baker will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Baker Hughes listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
0.51
Dividend Share
0.83
Earnings Share
2.23
Revenue Per Share
27.368
Quarterly Revenue Growth
0.04
The market value of Baker Hughes is measured differently than its book value, which is the value of Baker that is recorded on the company's balance sheet. Investors also form their own opinion of Baker Hughes' value that differs from its market value or its book value, called intrinsic value, which is Baker Hughes' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Baker Hughes' market value can be influenced by many factors that don't directly affect Baker Hughes' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Baker Hughes' value and its price as these two are different measures arrived at by different means. Investors typically determine if Baker Hughes is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Baker Hughes' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Baker Hughes Current Valuation vs. Return On Equity Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Baker Hughes's current stock value. Our valuation model uses many indicators to compare Baker Hughes value to that of its competitors to determine the firm's financial worth.
Baker Hughes Co is rated third in return on equity category among its peers. It is the top company in current valuation category among its peers reporting about  301,619,742,694  of Current Valuation per Return On Equity. At this time, Baker Hughes' Return On Equity is relatively stable compared to the past year. Comparative valuation analysis is a catch-all technique that is used if you cannot value Baker Hughes by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

Baker Current Valuation vs. Return On Equity

Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Baker Hughes

Return On Equity

 = 

Net Income

Total Equity

 = 
0.14
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.

Baker Hughes

Enterprise Value

 = 

Market Cap + Debt

-

Cash

 = 
43.1 B
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.

Baker Current Valuation vs Competition

Baker Hughes Co is the top company in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Energy industry is currently estimated at about 50.3 Billion. Baker Hughes totals roughly 43.1 Billion in current valuation claiming about 86% of equities under Energy industry.

Baker Hughes Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Baker Hughes, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Baker Hughes will eventually generate negative long term returns. The profitability progress is the general direction of Baker Hughes' change in net profit over the period of time. It can combine multiple indicators of Baker Hughes, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-2.8 B-2.9 B
Operating Income2.3 B1.2 B
Income Before Tax2.7 B2.8 B
Total Other Income Expense Net338 M354.9 M
Net IncomeB2.1 B
Income Tax Expense-685 M-650.8 M
Interest Income303.6 M256.3 M
Net Income From Continuing Ops1.7 B1.8 B
Net Loss-540.9 M-567.9 M
Net Interest Income-235 M-246.8 M
Non Operating Income Net Other-819.9 M-778.9 M
Change To NetincomeB953.8 M
Net Income Per Share 1.93  2.02 
Income Quality 1.55  1.63 
Net Income Per E B T 0.73  0.77 

Baker Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Baker Hughes. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Baker Hughes position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Baker Hughes' important profitability drivers and their relationship over time.

Use Baker Hughes in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Baker Hughes position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Baker Hughes will appreciate offsetting losses from the drop in the long position's value.

Baker Hughes Pair Trading

Baker Hughes Co Pair Trading Analysis

The ability to find closely correlated positions to Baker Hughes could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Baker Hughes when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Baker Hughes - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Baker Hughes Co to buy it.
The correlation of Baker Hughes is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Baker Hughes moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Baker Hughes moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Baker Hughes can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

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Additional Tools for Baker Stock Analysis

When running Baker Hughes' price analysis, check to measure Baker Hughes' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Baker Hughes is operating at the current time. Most of Baker Hughes' value examination focuses on studying past and present price action to predict the probability of Baker Hughes' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Baker Hughes' price. Additionally, you may evaluate how the addition of Baker Hughes to your portfolios can decrease your overall portfolio volatility.