Critical Contrast: Baker Hughes (NASDAQ:BKR) versus Shawcor (OTCMKTS:SAWLF)

Shawcor (OTCMKTS:SAWLF) and Baker Hughes (NASDAQ:BKR) are both energy companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, earnings, valuation, profitability and analyst recommendations.

Dividends

Shawcor pays an annual dividend of $0.55 per share and has a dividend yield of 3.9%. Baker Hughes pays an annual dividend of $0.92 per share and has a dividend yield of 1.5%. Shawcor pays out 24.2% of its earnings in the form of a dividend. Baker Hughes pays out 29.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Baker Hughes has raised its dividend for 4 consecutive years. Shawcor is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Shawcor and Baker Hughes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shawcor	N/A	N/A	N/A
Baker Hughes	11.17%	13.85%	5.80%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Shawcor and Baker Hughes, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shawcor	0	0	0	0	0.00
Baker Hughes	0	4	17	0	2.81

Baker Hughes has a consensus target price of $70.43, indicating a potential upside of 12.18%. Given Baker Hughes’ stronger consensus rating and higher probable upside, analysts clearly believe Baker Hughes is more favorable than Shawcor.

Institutional & Insider Ownership

61.8% of Shawcor shares are held by institutional investors. Comparatively, 92.1% of Baker Hughes shares are held by institutional investors. 0.2% of Baker Hughes shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Shawcor and Baker Hughes”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shawcor	N/A	N/A	N/A	$2.27	6.17
Baker Hughes	$27.73 billion	2.25	$2.59 billion	$3.10	20.25

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

Summary

Baker Hughes beats Shawcor on 12 of the 14 factors compared between the two stocks.

About Shawcor

Shawcor Ltd., doing business as Mattr Infratech, operates as a material sciences company that serves the infrastructure, energy, and transportation markets worldwide. It operates through three segments: Composite Technologies, Connection Technologies, and Pipeline and Pipe Services. The Composite Technologies segment manufactures flexible composite that are used for oil and gas gathering, and other applications; fiberglass reinforced plastic underground storage tanks for the retail fuel, water and wastewater, and oil and gas markets. The Connection Technologies segment manufactures heat-shrinkable products, including thin, medium, and heavy-walled tubing; sleeves and molded products, as well as heat-shrink accessories and equipment; and low-voltage wires and cables for control, instrumentation, thermocouple, power, and industrial applications. The Pipeline and Pipe Services segment offers ultrasonic and radiographic pipeline girth weld inspection services to pipeline operators and construction contractors. The company was formerly known as Shaw Industries Ltd. and changed its name to Shawcor Ltd. in 2001. Shawcor Ltd. was founded in 1930 and is headquartered in Toronto, Canada.

About Baker Hughes

Baker Hughes Company provides a portfolio of technologies and services to energy and industrial value chain worldwide. The company operates through Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments. The OFSE segment designs and manufactures products and provides related services, including exploration, appraisal, development, production, rejuvenation, and decommissioning for onshore and offshore oilfield operations. This segment also provides drilling services, drill bits, and drilling and completions fluids; completions, intervention, measurements, pressure pumping, and wireline services; artificial lift systems, and oilfield and industrial chemicals; subsea projects and services, flexible pipe systems, and surface pressure control systems; and integrated well services and solutions. It serves oil and natural gas companies; the United States and international independent oil and natural gas companies; national or state-owned oil companies; engineering, procurement, and construction contractors; geothermal companies; and other oilfield service companies. The IET segment provides gas technology equipment, including drivers, driven equipment, flow control, and turnkey solutions for the mechanical-drive, compression, and power-generation applications; and energy sectors, such as oil and gas, LNG operations, petrochemical, and carbon solutions. This segment also provides rack-based vibration monitoring equipment and sensors; integrated asset performance management products; inspection services; pumps, valves, and gears; precision sensors and instrumentation, and condition monitoring solutions. It serves upstream, midstream, downstream, onshore, offshore, and small and large scale customers. 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 was incorporated in 2016 and is based in Houston, Texas.