BKR
Baker Hughes Company
Energy · Oil & Gas Equipment & Services · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The company scores well on financial health and dividend sustainability, with a low debt-to-equity ratio of 0.32 and a balanced payout ratio of 35.2%, anchoring the composite score.
- Solid profitability metrics — a 10.4% operating margin and 6.3% return on assets — place Baker Hughes above average on the profitability dimension.
- The growth factor weighed on the overall score due to FY2025 revenue and net income declines, and the absence of a macro theme assignment contributed zero thematic score.
Why Not Higher
- FY2025 saw both revenue and net income contract — revenue by 0.3% and net income by 13.1% — which meaningfully penalized the growth score and capped the composite total.
- The lack of any macro theme assignment means Baker Hughes received no thematic score contribution, leaving a full factor's worth of potential points unrealized.
Data Confidence
8 / 10
High — most data fields present
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue declined from FY2024's $27,829,000,000 to FY2025's $27,733,000,000 (-0.3%), and net income fell from FY2024's $2,979,000,000 to FY2025's $2,588,000,000 (-13.1%). The prior-year comparison was more favorable, with diluted EPS rising from FY2023's $1.91 to FY2024's $2.98 (+56.0%).
The model penalized the recent top- and bottom-line contraction in FY2025, which offset the strong EPS rebound seen in FY2024, resulting in a below-midpoint growth score.
In FY2025, Baker Hughes posted a net margin of 9.3%, an operating margin of 10.4%, and a return on assets of 6.3%.
These metrics reflect a solidly profitable business, and the model rewarded the double-digit operating margin and positive asset returns, placing the score above the midpoint though not at the top of the range.
In FY2025, Baker Hughes carried a debt-to-equity ratio of 0.32 against total assets of $40,881,000,000.
A debt-to-equity ratio of 0.32 in FY2025 signals a conservatively leveraged balance sheet, which the model rewarded with a high financial health score; the large asset base further supports the company's financial stability.
Over the last four quarters, operating income accelerated sharply to $1,274,000,000 in 2026Q1 after a trough of $528,000,000 in 2025Q4, and net income rose to $930,000,000 in 2026Q1 from $609,000,000 in 2025Q3. Revenue showed a dip to $6,587,000,000 in 2026Q1 after peaking at $7,386,000,000 in 2025Q4.
The model rewarded the strong acceleration in operating and net income into 2026Q1, while the sequential revenue pullback in 2026Q1 tempered the score slightly below the top of the range.
Baker Hughes maintained a dividend payout ratio of 35.2% in FY2025, measured as dividends paid relative to net income.
A payout ratio of 35.2% in FY2025 suggests the company returns a meaningful portion of earnings to shareholders while retaining sufficient capital for reinvestment, a balance the model rewarded with a near-top dividend score.
Baker Hughes is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a theme assignment means the company did not qualify for any thematic score contribution under the model's current methodology; this is a neutral classification rather than a reflection of the company's business quality.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Baker Hughes is a large, conservatively leveraged oilfield services company that delivered stable but slightly declining annual results in FY2025, with revenue essentially flat at $27.7 billion and net income down 13.1% to $2.6 billion, even as the prior year had seen a strong 56% EPS rebound. Profitability remains solid, with a 10.4% operating margin and 9.3% net margin, supported by a low debt-to-equity ratio of 0.32 against a $40.9 billion asset base. Quarterly momentum has turned notably positive heading into 2026, with operating income surging to $1.27 billion in 2026Q1 from a trough of $528 million in 2025Q4. The company's 35.2% dividend payout ratio reflects a disciplined capital return policy that balances shareholder distributions with reinvestment capacity.
Plain English
Baker Hughes is a big energy services company that is financially stable and pays a reliable dividend — its profits dipped a bit last year, but its most recent quarter showed a strong earnings rebound, and it carries very little debt relative to its size.
Bull Case vs. Bear Case
Bull Case
- Operating income surged to $1,274,000,000 in 2026Q1 from a trough of $528,000,000 in 2025Q4, signaling a sharp acceleration in profitability momentum heading into the new fiscal year.
- The balance sheet is conservatively structured with a debt-to-equity ratio of just 0.32 and total assets of $40.9 billion, providing significant financial stability and flexibility.
- A dividend payout ratio of 35.2% in FY2025 demonstrates a sustainable and meaningful return of capital to shareholders while retaining earnings for reinvestment.
Bear Case
- Revenue declined 0.3% year-over-year in FY2025 and net income fell 13.1%, indicating near-term top- and bottom-line pressure after a strong FY2024.
- Sequential revenue pulled back to $6,587,000,000 in 2026Q1 after peaking at $7,386,000,000 in 2025Q4, suggesting demand may be uneven quarter to quarter.
- Baker Hughes is not assigned to any of the 24 tracked macro themes, meaning it does not benefit from thematic tailwinds that could boost its composite score or investor attention.
What Could Change the Picture
Bullish Triggers
- A sustained recovery in quarterly revenue back toward the 2025Q4 peak of $7,386,000,000, combined with continued operating income strength, would signal that the FY2025 contraction was temporary.
- Expansion of net margin beyond the current 9.3% would demonstrate improving operational efficiency and could strengthen the overall investment case.
Bearish Triggers
- If net income continues to decline beyond the 13.1% drop seen in FY2025, the dividend payout ratio of 35.2% could come under pressure, raising questions about dividend sustainability.
- A further sequential revenue decline below the 2026Q1 level of $6,587,000,000 would suggest the operating income rebound may not be durable.
Risk Profile
Low RiskBaker Hughes carries a low debt-to-equity ratio of 0.32 against a $40.9 billion asset base, indicating a conservatively leveraged balance sheet that limits financial distress risk. Quarterly earnings momentum is positive heading into 2026, with net income rising to $930,000,000 in 2026Q1, though the sequential revenue dip to $6,587,000,000 in the same quarter introduces some near-term demand uncertainty.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.