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Baker Hughes Company (BKR)

Company Dividend Discount ModelIndustry: Oil & Gas Equipment & ServicesSector: Energy

Valuation Snapshot

Stable Growth$68.14 - $180.75$104.19
Multi-Stage$47.00 - $51.33$49.12
Blended Fair Value$76.66
Current Price$48.72
Upside57.34%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS16.18%11.60%0.840.790.730.590.490.400.320.160.000.30
YoY Growth--6.36%8.26%22.64%21.31%23.54%25.40%103.23%0.00%-100.00%6.45%
Dividend Yield--1.91%2.36%2.53%1.63%2.27%3.78%1.14%0.56%0.00%0.97%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,891.00
(-) Cash Dividends Paid (M)891.00
(=) Cash Retained (M)2,000.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)578.20361.38216.83
Cash Retained (M)2,000.002,000.002,000.00
(-) Cash Required (M)-578.20-361.38-216.83
(=) Excess Retained (M)1,421.801,638.631,783.18
(/) Shares Outstanding (M)995.25995.25995.25
(=) Excess Retained per Share1.431.651.79
LTM Dividend per Share0.900.900.90
(+) Excess Retained per Share1.431.651.79
(=) Adjusted Dividend2.322.542.69
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$68.14$104.19$180.75
Upside / Downside39.86%113.86%271.01%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,891.003,078.923,279.043,492.183,719.173,960.924,079.75
Payout Ratio30.82%42.66%54.49%66.33%78.16%90.00%92.50%
Projected Dividends (M)891.001,313.341,786.812,316.292,907.053,564.833,773.77

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)1,192.511,203.811,215.12
Year 2 PV (M)1,473.161,501.221,529.55
Year 3 PV (M)1,734.011,783.791,834.51
Year 4 PV (M)1,976.052,052.042,130.20
Year 5 PV (M)2,200.232,306.512,416.85
PV of Terminal Value (M)38,196.0140,040.8941,956.38
Equity Value (M)46,771.9748,888.2651,082.60
Shares Outstanding (M)995.25995.25995.25
Fair Value$47.00$49.12$51.33
Upside / Downside-3.54%0.82%5.35%

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