Baker Hughes A GE (NYSE: BHI) and CSI Compressco (NASDAQ:CCLP) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, dividends, earnings, profitability and institutional ownership.

Profitability

This table compares Baker Hughes A GE and CSI Compressco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Baker Hughes A GE -7.45% -5.80% -3.84%
CSI Compressco -17.01% -36.43% -6.45%

Volatility & Risk

Baker Hughes A GE has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, CSI Compressco has a beta of 2.02, suggesting that its stock price is 102% more volatile than the S&P 500.

Earnings & Valuation

This table compares Baker Hughes A GE and CSI Compressco’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Baker Hughes A GE N/A N/A N/A ($4.36) -13.23
CSI Compressco N/A N/A N/A ($1.50) -2.97

Baker Hughes A GE is trading at a lower price-to-earnings ratio than CSI Compressco, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for Baker Hughes A GE and CSI Compressco, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Baker Hughes A GE 1 14 12 0 2.41
CSI Compressco 0 3 1 0 2.25

Baker Hughes A GE currently has a consensus price target of $62.19, indicating a potential upside of 7.81%. CSI Compressco has a consensus price target of $9.00, indicating a potential upside of 102.25%. Given CSI Compressco’s higher probable upside, analysts plainly believe CSI Compressco is more favorable than Baker Hughes A GE.

Insider and Institutional Ownership

91.3% of Baker Hughes A GE shares are owned by institutional investors. Comparatively, 28.2% of CSI Compressco shares are owned by institutional investors. 0.7% of Baker Hughes A GE shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Baker Hughes A GE pays an annual dividend of $0.68 per share and has a dividend yield of 1.2%. CSI Compressco pays an annual dividend of $0.75 per share and has a dividend yield of 16.9%. Baker Hughes A GE pays out -15.6% of its earnings in the form of a dividend. CSI Compressco pays out -50.0% 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. CSI Compressco is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Baker Hughes A GE beats CSI Compressco on 7 of the 12 factors compared between the two stocks.

About Baker Hughes A GE

Baker Hughes, a GE Company is an oil and gas company. The Company is a provider of integrated oilfield products, services and digital solutions. The Company’s products and services include upstream, midstream, downstream, industrial and digital. The Company’s upstream, which includes evaluation, drilling, completions and production. Midstream enables the power and compression efficiency for LNG and pipeline and storage. Downstream builds reliability and safety into process operations that includes refining and petrochemical and fertilizer solutions. The company’s industrial solutions offers power generation, to advanced control systems and sensing technology that power industrial facilities. Digital transformation integrates data on an open platform with security and scale. The digital transformation enables field services with real-time insights. The Company’s technology delivers capacities in smaller footprints.

About CSI Compressco

CSI Compressco LP is a provider of compression services and equipment for natural gas and oil production, gathering, transportation, processing and storage. The Company sells custom-designed compressor packages and oilfield fluid pump systems, and provides aftermarket services and compressor package parts and components manufactured by third-party suppliers. It provides these compression services and equipment to a base of natural gas and oil exploration and production, midstream and transmission companies operating throughout many of the onshore producing regions of the United States, as well as in a number of foreign countries, including Mexico, Canada and Argentina. It is a service provider of natural gas compression services in the United States, utilizing its fleet of compressor packages that employs a spectrum of low-, medium- and high-horsepower engines. As of December 31, 2016, its fleet included approximately 6,000 compressor packages.

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