Is Baker Hughes Company (BKR) The Best Crude Oil Stock To Buy Right Now?

Baker Hughes Company (BKR) has emerged as a strong contender in the crude oil stock market, with its strategic focus on industrial and energy technology (IET) contributing significantly to its growth and resilience. As the energy industry continues to evolve, BKR's diversified portfolio, innovative solutions, and recurring revenue streams have positioned it well to capitalize on new opportunities and maintain consistent performance. In this article, we will explore the key fundamentals that make BKR a compelling investment option and compare its performance to its peers.



Key Fundamentals of Baker Hughes (BKR)

1. Strong Financial Performance: BKR has consistently delivered robust financial results, with revenue and attributable net income growing significantly in recent quarters. In the third quarter of 2024, the company reported revenue of $6.9 billion, up 4% year-over-year, and attributable net income of $766 million, up 32% sequentially and 48% year-over-year (Baker Hughes, 2024). This strong financial performance is a testament to the company's operational discipline and ability to generate earnings and free cash flow across cycles.
2. Diversified Portfolio: BKR's portfolio is diversified across two segments: Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET). This diversification helps the company mitigate risks associated with fluctuations in the oil and gas market. In the third quarter of 2024, IET orders reached $2.9 billion, marking the eighth consecutive quarter at or above this level (Baker Hughes, 2024).
3. Growth in Industrial & Energy Technology: The IET segment has been a significant driver of growth for BKR. In the third quarter of 2024, IET orders were up 22% year-over-year, and adjusted EBITDA was up 23% year-over-year (Baker Hughes, 2024). This growth is driven by strong order momentum for gas infrastructure and FPSOs, as well as recurring service revenue and untapped market opportunities.
4. Strong Order Backlog: BKR has a robust order backlog, which provides visibility into future earnings. As of September 30, 2024, the company's total order backlog was $33.4 billion, including a record IET RPO of $30.2 billion (Baker Hughes, 2024). This strong backlog indicates that the company is well-positioned to maintain its growth trajectory.
5. Investment in Technology and Innovation: BKR is investing in technology and innovation to stay ahead of the curve in the rapidly evolving energy landscape. The company's iCenter™ Remote Monitoring and Diagnostics capabilities, for example, enable it to provide digital solutions and maintenance services for LNG facilities, further expanding its market reach.
6. Shareholder Returns: BKR has a strong track record of returning capital to shareholders. In the third quarter of 2024, the company returned $361 million to shareholders, including $152 million in share repurchases (Baker Hughes, 2024). This commitment to shareholder returns demonstrates the company's confidence in its financial performance and growth prospects.

Comparing BKR to Its Peers

When compared to its peers, such as Schlumberger (SLB) and Halliburton (HAL), BKR stands out due to its diversified portfolio, strong financial performance, and commitment to technology and innovation. While SLB and HAL are also well-established players in the oil and gas industry, BKR's focus on the IET segment and its strong order backlog position it as a strong contender in the crude oil stock market.

Conclusion

Baker Hughes Company (BKR) is a strong contender as the best crude oil stock to buy right now, with its strategic focus on industrial and energy technology contributing significantly to its growth and resilience. The company's diversified portfolio, strong financial performance, and commitment to technology and innovation make it an attractive investment option in the crude oil stock market. As the energy industry continues to evolve, BKR is well-positioned to capitalize on new opportunities and maintain consistent performance, making it an appealing choice for investors seeking exposure to the crude oil sector.