Financial Contrast: Baker Hughes (NYSE:BKR) and Newpark Resources (NYSE:NR)

Baker Hughes (NYSE:BKR) and Newpark Resources (NYSE:NR) are both oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.

Dividends

Baker Hughes pays an annual dividend of $0.72 per share and has a dividend yield of 3.2%. Newpark Resources does not pay a dividend. Baker Hughes pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings for Baker Hughes and Newpark Resources, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Baker Hughes 0 0 1 0 3.00
Newpark Resources 0 0 2 0 3.00

Baker Hughes currently has a consensus price target of $28.00, indicating a potential upside of 26.30%. Newpark Resources has a consensus price target of $11.00, indicating a potential upside of 63.57%. Given Newpark Resources’ higher probable upside, analysts plainly believe Newpark Resources is more favorable than Baker Hughes.

Earnings and Valuation

This table compares Baker Hughes and Newpark Resources’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Baker Hughes $22.88 billion 1.01 $195.00 million $0.66 33.67
Newpark Resources $946.55 million 0.64 $32.28 million $0.41 16.41

Baker Hughes has higher revenue and earnings than Newpark Resources. Newpark Resources is trading at a lower price-to-earnings ratio than Baker Hughes, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Baker Hughes and Newpark Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Baker Hughes 0.89% 1.19% 0.78%
Newpark Resources 1.68% 3.50% 2.15%

Volatility & Risk

Baker Hughes has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Newpark Resources has a beta of 1.54, meaning that its stock price is 54% more volatile than the S&P 500.

Insider & Institutional Ownership

48.4% of Baker Hughes shares are owned by institutional investors. Comparatively, 99.6% of Newpark Resources shares are owned by institutional investors. 0.2% of Baker Hughes shares are owned by insiders. Comparatively, 5.2% of Newpark Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Newpark Resources beats Baker Hughes on 9 of the 15 factors compared between the two stocks.

Baker Hughes Company Profile

Baker Hughes Company provides integrated oilfield products, services, and digital solutions worldwide. Its Oilfield Services segment offers drilling, wireline, evaluation, completion, production, and intervention services; and drilling and completions fluids, completions tools and systems, wellbore intervention tools and services, artificial lift systems, pressure pumping systems, and oilfield and industrial chemicals for integrated oil and natural gas and oilfield service companies. The company's Oilfield Equipment segment designs and manufactures products and services, including pressure control equipment and services, subsea production systems and services, drilling equipment, and flexible pipeline systems; and onshore and offshore drilling and production systems, and equipment for floating production platforms, as well as provides a range of services related to onshore and offshore drilling activities. Its Turbomachinery & Process Solutions segment provides equipment and related services for mechanical-drive, compression, and power-generation applications across the oil and gas industry. Its product portfolio includes drivers, compressors, and turnkey solutions; and pumps, valves, and compressed natural gas and small-scale liquefied natural gas solutions. This segment serves upstream, midstream, onshore and offshore, industrial, engineering, procurement, and construction companies. The company's Digital Solutions segment provides sensor-based measurement, non-destructive testing and inspection, turbine, generator and plant controls, and condition monitoring, as well as pipeline integrity solutions for a range of industries, including oil and gas, power generation, aerospace, metals, and transportation. It serves through direct and indirect channels. The company was formerly known as Baker Hughes, a GE company and changed its name to Baker Hughes Company in October 2019. Baker Hughes Company is based in Houston, Texas.

Newpark Resources Company Profile

Newpark Resources, Inc. provides products, rentals, and services primarily to the oil and natural gas exploration and production industry. It operates through two segments, Fluids Systems, and Mats and Integrated Services. The Fluids Systems segment offers drilling and completion fluids solutions, and technical services to customers in the North America, Europe, the Middle East, Africa, Latin America, and the Asia Pacific regions. The Mats and Integrated Services segment offers composite mat rental, construction, and related site services to customers in various markets, including oil and gas exploration and production, electrical transmission and distribution, pipeline, solar, petrochemical, and construction industries in the United States, Canada, Europe, and internationally. The company was founded in 1932 and is headquartered in The Woodlands, Texas.

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