Head-To-Head Review: Baker Hughes (NASDAQ:BKR) and Ranger Energy Services (NYSE:RNGR)

Ranger Energy Services (NYSE:RNGR) and Baker Hughes (NASDAQ:BKR) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, analyst recommendations, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Ranger Energy Services and Baker Hughes, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ranger Energy Services	1	1	1	0	2.00
Baker Hughes	0	3	23	0	2.88

Ranger Energy Services presently has a consensus price target of $13.00, suggesting a potential downside of 7.65%. Baker Hughes has a consensus price target of $53.92, suggesting a potential upside of 14.38%. Given Baker Hughes’ stronger consensus rating and higher probable upside, analysts plainly believe Baker Hughes is more favorable than Ranger Energy Services.

Profitability

This table compares Ranger Energy Services and Baker Hughes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ranger Energy Services	2.72%	5.60%	4.05%
Baker Hughes	10.43%	14.22%	6.49%

Institutional and Insider Ownership

68.1% of Ranger Energy Services shares are owned by institutional investors. Comparatively, 92.1% of Baker Hughes shares are owned by institutional investors. 2.8% of Ranger Energy Services shares are owned by company insiders. Comparatively, 0.3% of Baker Hughes shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Ranger Energy Services and Baker Hughes”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ranger Energy Services	$571.10 million	0.53	$18.40 million	$0.65	21.66
Baker Hughes	$27.83 billion	1.67	$2.98 billion	$2.90	16.26

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

Risk & Volatility

Ranger Energy Services has a beta of 0.15, suggesting that its stock price is 85% less volatile than the S&P 500. Comparatively, Baker Hughes has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Dividends

Ranger Energy Services pays an annual dividend of $0.24 per share and has a dividend yield of 1.7%. Baker Hughes pays an annual dividend of $0.92 per share and has a dividend yield of 2.0%. Ranger Energy Services pays out 36.9% of its earnings in the form of a dividend. Baker Hughes pays out 31.7% 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. Ranger Energy Services has increased its dividend for 2 consecutive years and Baker Hughes has increased its dividend for 4 consecutive years. Baker Hughes is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Baker Hughes beats Ranger Energy Services on 15 of the 17 factors compared between the two stocks.

About Ranger Energy Services

Ranger Energy Services, Inc. provides onshore high specification well service rigs, wireline services, and complementary services to exploration and production companies in the United States. It operates through three segments: High Specification Rigs, Wireline Services, and Processing Solutions and Ancillary Services. The High Specification Rigs segment offers well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well; and well maintenance services. This segment also has a fleet of 402 well service rigs. The Wireline Services segment provides wireline production and intervention services to provide information to identify and resolve well production problems through cased hole logging, perforating, mechanical, and pipe recovery services; wireline completion services that are used primarily for pump down perforating operations to create perforations or entry holes through the production casing; and pumping services. This segment also has a fleet of 66 wireline units and 29 high-pressure pump trucks. The Processing Solutions and Ancillary Services segment rents well service-related equipment consisting of fluid pumps, power swivels, well control packages, hydraulic catwalks, frac tanks, pipe racks, and pipe handling tools; and coiled tubing, decommissioning, and snubbing services, as well as provides proprietary and modular equipment for the processing of natural gas streams. This segment also engages in the rental, installation, commissioning, start up, operation, and maintenance of mechanical refrigeration units, nitrogen gas liquid stabilizer units, nitrogen gas liquid storage units, and related equipment. Ranger Energy Services, Inc. was incorporated in 2017 and is headquartered in Houston, Texas.

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.