Comparing Baker Hughes (NASDAQ:BKR) and Kinetik (NYSE:KNTK)

Baker Hughes (NASDAQ:BKR) and Kinetik (NYSE:KNTK) are both energy companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Volatility & Risk

Baker Hughes has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, Kinetik has a beta of 3.11, suggesting that its share price is 211% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Baker Hughes and Kinetik, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baker Hughes	0	4	22	0	2.85
Kinetik	0	5	7	0	2.58

Baker Hughes currently has a consensus price target of $52.91, suggesting a potential upside of 11.87%. Kinetik has a consensus price target of $51.70, suggesting a potential upside of 32.90%. Given Kinetik’s higher probable upside, analysts plainly believe Kinetik is more favorable than Baker Hughes.

Dividends

Baker Hughes pays an annual dividend of $0.92 per share and has a dividend yield of 1.9%. Kinetik pays an annual dividend of $3.12 per share and has a dividend yield of 8.0%. Baker Hughes pays out 30.1% of its earnings in the form of a dividend. Kinetik pays out 421.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Baker Hughes has increased its dividend for 4 consecutive years and Kinetik has increased its dividend for 1 consecutive years.

Profitability

This table compares Baker Hughes and Kinetik’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baker Hughes	11.04%	14.56%	6.53%
Kinetik	8.21%	-6.16%	1.95%

Institutional and Insider Ownership

92.1% of Baker Hughes shares are owned by institutional investors. Comparatively, 21.1% of Kinetik shares are owned by institutional investors. 0.3% of Baker Hughes shares are owned by company insiders. Comparatively, 3.8% of Kinetik shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Baker Hughes and Kinetik”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baker Hughes	$27.83 billion	1.68	$2.98 billion	$3.06	15.46
Kinetik	$1.48 billion	4.25	$244.23 million	$0.74	52.57

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

Summary

Baker Hughes beats Kinetik on 11 of the 17 factors compared between the two stocks.

About Baker Hughes

Baker Hughes Company provides a portfolio of technologies and services to energy and industrial value chain worldwide. The company operates through Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments. The OFSE segment designs and manufactures products and provides related services, including exploration, appraisal, development, production, rejuvenation, and decommissioning for onshore and offshore oilfield operations. This segment also provides drilling services, drill bits, and drilling and completions fluids; completions, intervention, measurements, pressure pumping, and wireline services; artificial lift systems, and oilfield and industrial chemicals; subsea projects and services, flexible pipe systems, and surface pressure control systems; and integrated well services and solutions. It serves oil and natural gas companies; the United States and international independent oil and natural gas companies; national or state-owned oil companies; engineering, procurement, and construction contractors; geothermal companies; and other oilfield service companies. The IET segment provides gas technology equipment, including drivers, driven equipment, flow control, and turnkey solutions for the mechanical-drive, compression, and power-generation applications; and energy sectors, such as oil and gas, LNG operations, petrochemical, and carbon solutions. This segment also provides rack-based vibration monitoring equipment and sensors; integrated asset performance management products; inspection services; pumps, valves, and gears; precision sensors and instrumentation, and condition monitoring solutions. It serves upstream, midstream, downstream, onshore, offshore, and small and large scale customers. 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 was incorporated in 2016 and is based in Houston, Texas.

About Kinetik

Kinetik Holdings Inc. operates as a midstream company in the Texas Delaware Basin. It provides gathering, transportation, compression, processing, and treating services for companies that produce natural gas, natural gas liquids, crude oil, and water. The company is headquartered in Midland, Texas.