Critical Analysis: Forum Energy Technologies (FET) versus Baker Hughes, a GE (BHGE)

Forum Energy Technologies (NYSE: FET) and Baker Hughes, a GE (NYSE:BHGE) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Profitability

This table compares Forum Energy Technologies and Baker Hughes, a GE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Forum Energy Technologies -1.48% -2.40% -1.56%
Baker Hughes, a GE -1.28% 0.25% 0.17%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Forum Energy Technologies and Baker Hughes, a GE, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Forum Energy Technologies 0 11 2 0 2.15
Baker Hughes, a GE 0 14 10 0 2.42

Forum Energy Technologies currently has a consensus price target of $14.73, indicating a potential upside of 5.95%. Baker Hughes, a GE has a consensus price target of $37.25, indicating a potential upside of 7.38%. Given Baker Hughes, a GE’s stronger consensus rating and higher probable upside, analysts plainly believe Baker Hughes, a GE is more favorable than Forum Energy Technologies.

Dividends

Baker Hughes, a GE pays an annual dividend of $0.72 per share and has a dividend yield of 2.1%. Forum Energy Technologies does not pay a dividend. Baker Hughes, a GE pays out 138.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

98.0% of Forum Energy Technologies shares are owned by institutional investors. Comparatively, 94.8% of Baker Hughes, a GE shares are owned by institutional investors. 30.0% of Forum Energy Technologies shares are owned by insiders. Comparatively, 0.2% of Baker Hughes, a GE shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Forum Energy Technologies and Baker Hughes, a GE’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Forum Energy Technologies $818.60 million 1.85 -$59.40 million ($0.38) -36.58
Baker Hughes, a GE $17.26 billion 0.84 $36.00 million $0.52 66.71

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

Volatility & Risk

Forum Energy Technologies has a beta of 1.9, meaning that its share price is 90% more volatile than the S&P 500. Comparatively, Baker Hughes, a GE has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.

Summary

Baker Hughes, a GE beats Forum Energy Technologies on 11 of the 16 factors compared between the two stocks.

About Forum Energy Technologies

Forum Energy Technologies, Inc. designs, manufactures, and distributes products to the oil and natural gas industry in the United States and internationally. The company operates in three segments: Drilling & Subsea, Completions, and Production & Infrastructure. The Drilling & Subsea segment designs and manufactures products, and provides related services to the drilling, energy subsea construction and service markets, and other markets, such as alternative energy, defense, and communications. This segment offers drilling technologies consisting of capital equipment and a line of products consumed in the drilling; and subsea technologies, including robotic vehicles and other capital equipment, specialty components and tools, complementary subsea technical services and rental items, and products used in pipeline infrastructure. The Completions segment provides products and related services to the well construction, completion, stimulation, and intervention markets. This segment offers downhole technologies comprising cementing and casing tools, completion products, and a range of downhole cable protection solutions; and stimulation and intervention technologies, including pumps and well stimulation consumable products, and related recertification and refurbishment services. The Production & Infrastructure segment designs, manufactures, and supplies products, and provides related equipment and services to the production and infrastructure markets. This segment supplies production equipment, including well site production and process equipment; and a range of industrial and process valves. The company was formerly known as Forum Oilfield Technologies, Inc. and changed its name to Forum Energy Technologies, Inc. in August 2010. Forum Energy Technologies, Inc. was incorporated in 2005 and is headquartered in Houston, Texas.

About Baker Hughes, a GE

Baker Hughes, a GE 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 for onshore and offshore operations. Its Oilfield Equipment segment designs and manufactures onshore and offshore drilling and production systems; equipment for floating production platforms; deepwater drilling equipment; subsea production systems; and flexible pipe products for operating environments. It also provides installation and decommissioning solutions; various services and solutions related to onshore and offshore drilling activities; and services for installation, technical support, and well access to oil and gas field developers, and drilling and oil companies. Its Turbomachinery & Process Solutions segment designs, manufactures, maintains, and upgrades rotating equipment; offers drivers, driven equipment, and flow control systems, as well as turnkey solutions, such as power generation modules, waste heat/energy recovery, energy storage, modularized small and large liquefaction plants, carbon capture, and storage/use facilities solutions; and provides system upgrades and conversion solutions. This segment serves upstream, midstream, downstream, onshore and offshore, industrial, engineering, procurement, and construction companies. Its Digital Solutions segment provides operating technologies; condition monitoring, inspection technologies, measurement, sensing, and pipeline solutions; and software solutions. It serves through direct and indirect channels. The company is based in Houston, Texas. Baker Hughes, a GE company is a subsidiary of General Electric Company.

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