Solaris Oilfield Infrastructure (NYSE:SOI) and Baker Hughes (NYSE:BKR) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.
Earnings & Valuation
This table compares Solaris Oilfield Infrastructure and Baker Hughes’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Solaris Oilfield Infrastructure||$197.20 million||2.83||$42.43 million||$1.69||6.95|
|Baker Hughes||$22.88 billion||0.99||$195.00 million||$0.66||33.55|
Risk & Volatility
Solaris Oilfield Infrastructure has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500. Comparatively, Baker Hughes has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.
Solaris Oilfield Infrastructure pays an annual dividend of $0.40 per share and has a dividend yield of 3.4%. Baker Hughes pays an annual dividend of $0.72 per share and has a dividend yield of 3.3%. Solaris Oilfield Infrastructure pays out 23.7% of its earnings in the form of 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. Solaris Oilfield Infrastructure is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Solaris Oilfield Infrastructure and Baker Hughes’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Solaris Oilfield Infrastructure||21.12%||22.39%||17.04%|
This is a breakdown of current ratings and recommmendations for Solaris Oilfield Infrastructure and Baker Hughes, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Solaris Oilfield Infrastructure||0||2||8||0||2.80|
Solaris Oilfield Infrastructure presently has a consensus price target of $17.65, suggesting a potential upside of 50.34%. Baker Hughes has a consensus price target of $30.00, suggesting a potential upside of 35.50%. Given Solaris Oilfield Infrastructure’s higher probable upside, equities research analysts clearly believe Solaris Oilfield Infrastructure is more favorable than Baker Hughes.
Institutional & Insider Ownership
67.3% of Solaris Oilfield Infrastructure shares are owned by institutional investors. Comparatively, 97.5% of Baker Hughes shares are owned by institutional investors. 14.2% of Solaris Oilfield Infrastructure shares are owned by insiders. Comparatively, 0.2% of Baker Hughes shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Solaris Oilfield Infrastructure beats Baker Hughes on 11 of the 16 factors compared between the two stocks.
About Solaris Oilfield Infrastructure
Solaris Oilfield Infrastructure, Inc. manufactures and rents mobile proppant and chemical management systems to unload, store, and deliver proppant and chemicals at oil and natural gas well sites in the United States. Its systems to transfer large quantities of proppant and chemicals to the well sites. It also provides trained personnel and last mile proppant logistics services; transloading and forward staging storage services; and Railtronix, a real-time inventory management software. The company serves oil and natural gas exploration and production, and oilfield service companies. Solaris Oilfield Infrastructure, Inc. was founded in 2014 and is based in Houston, Texas.
About Baker Hughes
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.
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