August 04, 2025 a 07:47 am
BKR: Dividend Analysis - Baker Hughes Company
📊 Baker Hughes Company presents a compelling dividend profile with a current yield of 2.07% accompanied by a rich 39-year dividend history, underpinned by a solid market position in the energy sector. Although the 3-year and 5-year growth figures suggest moderate increases, the company's payout ratios highlight strong commitment to return value to shareholders.
Overview
🗣️ The company operates in the energy sector and maintains strong dividend metrics. The yield, at 2.07%, indicates an attractive level of income generation, whereas its 39-year dividend continuity reflects robust management practices. Notably, there has been no recent cut or suspension, which suggests stability.
| Attribute | Details |
|---|---|
| Sector | Energy |
| Dividend yield | 2.07% |
| Current dividend per share | 0.84 USD |
| Dividend history | 39 years |
| Last cut or suspension | None |
Dividend History
📈 Understanding the company's dividend history is crucial in evaluating its commitment to rewarding shareholders. A consistent dividend payment over the years is a strong indicator of financial stability.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.69 |
| 2024 | 0.84 |
| 2023 | 0.78 |
| 2022 | 0.73 |
| 2021 | 0.72 |
Dividend Growth
📈 Examining the dividend growth over 3 and 5 years provides insight into the future potential and return prospects for investors. Sustained growth underpins shareholder value.
| 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
📊 The payout ratio is a key indicator used to gauge the sustainability of a company’s dividend payments. It reflects the portion of earnings and free cash flow distributed to shareholders.
| Key figure | Ratio |
|---|---|
| EPS-based | 27.11% |
| Free cash flow-based | 33.43% |
⚠️ With an EPS-based payout ratio at 27.11% and FCF-based at 33.43%, the company demonstrates a responsible dividend policy, ensuring financial flexibility for future obligations.
Cashflow & Capital Efficiency
📉 Cash flow efficiency is essential to maintaining operations, growing the business, and ensuring consistent dividend payments. Key metrics evaluate how well the company generates cash relative to various financial parameters.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Free Cash Flow Yield | 5.01% | 5.33% | 3.83% |
| Earnings Yield | 7.26% | 5.64% | -2.06% |
| 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 | 61.64% | 60.03% | 59.11% |
✅ The cash flow techniques reveal a slight positive trend, indicative of efficient allocation and operational proficiency which helps sustain thorough capital investments and shareholder returns.
Balance Sheet & Leverage Analysis
📉 A sound balance sheet underlines fiscal resilience and the ability to manage debt effectively, which is crucial for continued operations in fluctuating markets.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.36 | 0.39 | 0.46 |
| Debt-to-Assets | 0.16 | 0.16 | 0.19 |
| Debt-to-Capital | 0.26 | 0.28 | 0.32 |
| Net Debt to EBITDA | 0.58 | 0.85 | 3.12 |
| Current Ratio | 1.41 | 1.25 | 1.32 |
| Quick Ratio | 0.94 | 0.86 | 0.90 |
| Financial Leverage | 2.27 | 2.40 | 2.37 |
✅ The balance sheet strength is underscored by improving leverage ratios, suggesting prudent financial management and reduced risk exposure.
Fundamental Strength & Profitability
📈 A focus on profitability indicators serves to validate operational efficiencies and strategic direction, crucial for sustaining long-term growth and dividends.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 17.63% | 12.64% | -4.18% |
| Return on Assets | 7.77% | 5.26% | -1.76% |
| Return on Invested Capital | 11.16% | 7.13% | -130.91% |
| Net Profit Margin | 10.70% | 7.62% | -2.84% |
| Gross Profit Margin | 20.98% | 20.59% | 20.80% |
| EBIT Margin | 12.44% | 11.26% | 1.30% |
| EBITDA Margin | 16.52% | 15.52% | 6.31% |
| R&D to Revenue | 2.31% | 0% | 0% |
✅ Strong profitability metrics suggest effective management and optimized operations, aligning well with strategic growth initiatives and enhancing investor confidence.
Price Development
Dividend Scoring System
| Category | Description | Score |
|---|---|---|
| Dividend yield | Monthly income potential | |
| Dividend stability | Consistency in payments | |
| Dividend growth | Upward trend over time | |
| Payout ratio | Financial prudence | |
| Financial stability | Health of financial ratios | |
| Dividend continuity | Long-term payments | |
| Cashflow Coverage | Operational cash flow metric | |
| Balance Sheet Quality | Equity position |
Overall Score: 35/40
Rating
🗣️ With a solid dividend history and prudent financial discipline showcased by Baker Hughes Company, the stock maintains a positive rating. The moderate but consistent dividend growth, coupled with strong balance sheet figures and stable payout strategies, underscores Baker Hughes as a viable option for dividend-focused portfolios. Consider maintaining an overweight position.