April 15, 2025 a 11:31 am
BKR: Dividend Analysis - Baker Hughes Company
Baker Hughes Company (BKR) exhibits a robust dividend profile underpinned by its steadfast dividend history and a competitive yield. Coupled with moderate dividend growth and solid fundamentals, BKR presents a dependable investment for dividend-focused investors. However, due diligence is advised due to its exposure to market volatilities in the oil & gas industry.
📊 Overview
The following table outlines the dividend profile of Baker Hughes Company:
| Metric | Value |
|---|---|
| Sector | Energy |
| Dividend Yield | 1.83% |
| Current Dividend per Share | 0.84 USD |
| Dividend History | 39 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
Examining the past dividend payments of Baker Hughes Company reflects their consistent payout strategy and commitment to shareholders, which is crucial for assessing long-term dividend reliability. Consistency in payments over an extended period is often indicative of a company's financial health and resilience.
Below is a table of the last five dividend payments:
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.23 |
| 2024 | 0.84 |
| 2023 | 0.78 |
| 2022 | 0.73 |
| 2021 | 0.72 |
📈 Dividend Growth
Evaluating the growth of dividends provides insight into a company's financial health and its ability to increase shareholder value over time. Steady dividend growth often attracts long-term investors seeking income stability.
| Time | Growth |
|---|---|
| 3 years | 5.27% |
| 5 years | 3.13% |
The average dividend growth is 3.13% over 5 years. This shows moderate but steady dividend growth.
📉 Payout Ratio
Payout ratios are critical in evaluating how well earnings and free cash flow support dividend payments. A lower payout ratio indicates a cushion for maintaining dividends even when earnings fluctuate.
| Key Figure | Ratio |
|---|---|
| EPS-based | 27.99% |
| Free Cash Flow-based | 40.32% |
With an EPS payout ratio of 27.99% and FCF-based payout ratio of 40.32%, Baker Hughes maintains substantial coverage for dividends, indicating a sustainable dividend policy.
✅ Cashflow & Capital Efficiency
The efficiency of capital usage and cash flow health are pivotal for assessing a company’s operational effectiveness and long-term financial health. They provide insight into how well a company can reinvest profits and manage cash flows to support dividends.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 8.13% | 5.33% | 3.83% |
| Earnings Yield | 7.26% | 5.64% | -1.98% |
| CAPEX to Operating Cash Flow | 38.36% | 39.97% | 40.89% |
| Stock-based Compensation to Revenue | 0.73% | 0.77% | 0.98% |
| Free Cash Flow / Operating Cash Flow Ratio | 100% | 60% | 59% |
Over the past years, BKR has shown effective management of its capital and cash flow, demonstrated by consistent free cash flow generation. This signifies strong financial governance supporting potential continued dividend payouts.
🔍 Balance Sheet & Leverage Analysis
Analyzing leverage ratios and other balance sheet metrics is crucial for understanding financial risk and the capacity to cover long-term obligations. A strong balance sheet supports strategic investments and dividend policies.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.35 | 0.39 | 0.46 |
| Debt-to-Assets | 0.16 | 0.16 | 0.19 |
| Debt-to-Capital | 0.26 | 0.28 | 0.31 |
| Net Debt to EBITDA | 0.58 | 0.85 | 3.12 |
| Current Ratio | 1.32 | 1.25 | 1.32 |
| Quick Ratio | 0.94 | 0.86 | 0.90 |
| Financial Leverage | 2.25 | 2.40 | 2.35 |
BKR's balance sheet reflects prudent financial management with improving leverage ratios. This stability supports future financial flexibility and its dividend policy.
✨ Fundamental Strength & Profitability
A company's profitability is a key driver of its capacity to sustain dividends. Profitable operations coupled with efficient capital utilization are fundamental for consistent shareholder returns.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 17.47% | 12.64% | -3.98% |
| Return on Assets | 7.77% | 5.26% | -1.69% |
| Net Margin | 10.70% | 7.62% | -2.73% |
| EBIT Margin | 12.44% | 11.26% | 1.30% |
| Gross Margin | 21.25% | 20.59% | 20.79% |
| R&D to Revenue | 0% | 2.58% | 2.63% |
The profitability metrics show a positive turnaround over recent years, reinforcing investor confidence in BKR's ability to deliver sustainable returns through dividends.
📈 Price Development
✅ Dividend Scoring System
| Category | Score | Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 32/40
⭐ Rating
Baker Hughes Company exhibits a solid dividend profile underpinned by a consistent payment history and reliable financial metrics. With moderate growth prospects and a strong operational foundation, BKR stands out as a viable option for investors seeking stable dividend income in the energy sector. However, potential investors should remain vigilant to sector-related risks.