Baker Hughes Boosts Dividend: A Win for Income Investors

Baker Hughes (NASDAQ: BKR), the energy technology powerhouse, has just announced a 10% increase in its quarterly cash dividend. This move, effective from February 21, 2025, to holders of record on February 11, 2025, is a clear signal that the company is committed to returning value to its shareholders. The new dividend payout stands at $0.23 per share, up from the previous $0.21 per share.

This dividend hike is not an isolated event but part of a broader trend of responsible dividend growth at Baker Hughes. In the past, the company has increased its dividend by 5% (February 1, 2024) and 5.5% (October 27, 2022). This consistent growth reflects the company's strong financial performance and commitment to sharing its success with shareholders.

Baker Hughes' decision to fund its quarterly cash dividend from cash generated from operations is a testament to the company's robust financial health. The company's operating cash flow for the year ending December 31, 2024, was a healthy $3.07 billion, providing ample room for dividend payouts and reinvestment in the business.



For income investors, this dividend increase is a welcome development. The annual dividend is now $0.84 per share, with a yield of 1.90%. While this yield may not be as high as some other energy technology companies, such as Schlumberger (SLB) with a 3.20% yield, it is still competitive and offers a solid return on investment.

Moreover, Baker Hughes' dividend payout ratio is relatively low, at 37.8% as of December 31, 2024. This indicates that the company has room to continue growing its dividend while maintaining a strong balance sheet and reinvesting in its business.

In conclusion, Baker Hughes' 10% increase in its quarterly cash dividend is a win for income investors. The company's strong financial performance, commitment to dividend growth, and low payout ratio make it an attractive option for those seeking a steady stream of income from their investments. As the energy technology sector continues to evolve, Baker Hughes' dividend growth story is one to watch.