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Baker Hughes (BKR) Stock Jumps 55.2% YTD: More Room to Run?
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Shares of Baker Hughes Company (BKR - Free Report) have jumped 55.2% year to date (YTD) compared with the industry’s 14.8% growth. In 2022 and 2023, the Zacks Rank #3 (Hold) stock is likely to see year-over-year earnings growth of 104.8% and 38.4%, respectively.
Image Source: Zacks Investment Research
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The price of West Texas Intermediate crude, which is trading above $100 per barrel, has improved drastically in the past year. The commodity price shot up, primarily due to the escalation of Russian attacks on Ukraine.
High oil price is beneficial for exploration and production activities, which will lead to increased demand for oilfield services since oilfield service players help drillers efficiently set up oil and gas wells. Baker Hughes, a leading oilfield service player, is thus well-positioned to capitalize on the mounting demand.
Baker Hughes has a strong focus on returning capital to shareholders. Looking at the transformation milestones of BKR from 2017 through 2021, the company has maintained dividends and bought back $3.6 billion of stocks. In 2022 and beyond, Baker Hughes will continue to maintain this commitment.
Baker Hughes also has a strong balance sheet. Compared to composite stocks belonging to the industry, BKR has significantly lower exposure to debt capital.
Considering these factors, it seems that Baker Hughes has more room for further stock price appreciation.
Stocks to Consider
A few prospective players in the energy space areDevon Energy Corporation (DVN - Free Report) , Viper Energy Partners LP (VNOM - Free Report) and Centennial Resource Development, Inc. . While Devon Energy and Viper Energy Partners sport a Zacks Rank #1 (Strong Buy), Centennial Resource carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the United States, Devon Energy is a leading upstream player with a strong footprint in the prolific Delaware Basin. Devon Energy is also focused on returning capital to shareholders.
In the past seven days, Devon Energy has witnessed upward earnings estimate revisions for 2022.
In the prolific Permian and Eagle Ford shale play, Viper Energy has a net of 27,027 royalty acres. Operations in those undeveloped assets require zero capital requirement. This secures sustainable free cashflow for Viper Energy.
In the past seven days, Viper Energy has witnessed upward earnings estimate revisions for 2022.
In the Permian – the most prolific basin in the United States – Centennial Resource has a strong footprint. Centennial Resource has announced a $350-million share buyback program, reflecting its focus on returning capital to stockholders.
In the past 30 days, Centennial Resource has witnessed upward earnings estimate revisions for 2022.
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Baker Hughes (BKR) Stock Jumps 55.2% YTD: More Room to Run?
Shares of Baker Hughes Company (BKR - Free Report) have jumped 55.2% year to date (YTD) compared with the industry’s 14.8% growth. In 2022 and 2023, the Zacks Rank #3 (Hold) stock is likely to see year-over-year earnings growth of 104.8% and 38.4%, respectively.
Image Source: Zacks Investment Research
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The price of West Texas Intermediate crude, which is trading above $100 per barrel, has improved drastically in the past year. The commodity price shot up, primarily due to the escalation of Russian attacks on Ukraine.
High oil price is beneficial for exploration and production activities, which will lead to increased demand for oilfield services since oilfield service players help drillers efficiently set up oil and gas wells. Baker Hughes, a leading oilfield service player, is thus well-positioned to capitalize on the mounting demand.
Baker Hughes has a strong focus on returning capital to shareholders. Looking at the transformation milestones of BKR from 2017 through 2021, the company has maintained dividends and bought back $3.6 billion of stocks. In 2022 and beyond, Baker Hughes will continue to maintain this commitment.
Baker Hughes also has a strong balance sheet. Compared to composite stocks belonging to the industry, BKR has significantly lower exposure to debt capital.
Considering these factors, it seems that Baker Hughes has more room for further stock price appreciation.
Stocks to Consider
A few prospective players in the energy space areDevon Energy Corporation (DVN - Free Report) , Viper Energy Partners LP (VNOM - Free Report) and Centennial Resource Development, Inc. . While Devon Energy and Viper Energy Partners sport a Zacks Rank #1 (Strong Buy), Centennial Resource carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the United States, Devon Energy is a leading upstream player with a strong footprint in the prolific Delaware Basin. Devon Energy is also focused on returning capital to shareholders.
In the past seven days, Devon Energy has witnessed upward earnings estimate revisions for 2022.
In the prolific Permian and Eagle Ford shale play, Viper Energy has a net of 27,027 royalty acres. Operations in those undeveloped assets require zero capital requirement. This secures sustainable free cashflow for Viper Energy.
In the past seven days, Viper Energy has witnessed upward earnings estimate revisions for 2022.
In the Permian – the most prolific basin in the United States – Centennial Resource has a strong footprint. Centennial Resource has announced a $350-million share buyback program, reflecting its focus on returning capital to stockholders.
In the past 30 days, Centennial Resource has witnessed upward earnings estimate revisions for 2022.