Head-To-Head Survey: Baker Hughes (NASDAQ:BKR) vs. Drilling Tools International (NASDAQ:DTI)

Baker Hughes (NASDAQ:BKR) and Drilling Tools International (NASDAQ:DTI) are both oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.

Profitability

This table compares Baker Hughes and Drilling Tools International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baker Hughes	6.95%	11.42%	4.80%
Drilling Tools International	8.21%	14.88%	9.04%

Institutional & Insider Ownership

92.1% of Baker Hughes shares are held by institutional investors. Comparatively, 2.8% of Drilling Tools International shares are held by institutional investors. 0.3% of Baker Hughes shares are held by company insiders. Comparatively, 14.7% of Drilling Tools International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Baker Hughes has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Drilling Tools International has a beta of -0.96, meaning that its share price is 196% less volatile than the S&P 500.

Earnings and Valuation

This table compares Baker Hughes and Drilling Tools International’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baker Hughes	$25.51 billion	1.29	$1.94 billion	$1.79	18.45
Drilling Tools International	$152.03 million	1.12	$14.75 million	$0.43	13.35

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

Analyst Recommendations

This is a breakdown of current ratings for Baker Hughes and Drilling Tools International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baker Hughes	0	3	12	0	2.80
Drilling Tools International	0	1	0	0	2.00

Baker Hughes currently has a consensus target price of $40.94, indicating a potential upside of 23.98%. Drilling Tools International has a consensus target price of $3.00, indicating a potential downside of 47.74%. Given Baker Hughes’ stronger consensus rating and higher possible upside, equities analysts clearly believe Baker Hughes is more favorable than Drilling Tools International.

Summary

Baker Hughes beats Drilling Tools International on 10 of the 14 factors compared between the two stocks.

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.

About Drilling Tools International

Drilling Tools International Corporation provides oilfield equipment and services to oil and natural gas sectors in North America, Europe, and the Middle East. It offers downhole tool rentals, machining, and inspection services to support the global drilling and wellbore construction industry. The company also provides products are bottom hole assembly components, such as stabilizers, subs, non-magnetic and steel drill collars, hole openers, and roller reamers, as well as drill pipe and drill pipe accessories; ancillary equipment and handling tools to support its rental platform, including float valves, ring gauges, tool baskets, lift bail, lift subs, mud magnets, elevators, bracket and bail assemblies, slips, tongs, stabbing guides and safety clamps; and blowout preventers, and pressure control accessory equipment. In addition, it offers tool rental services, which consists of rental, inspection, machining, and repair services; rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas; rents kellys, pip joints, work strings; maintains a fleet of rental equipment consisting of drill collars, stabilizers, crossover subs, wellbore conditioning tools, drill pipe, hevi-wate drill pipe, and tubing; rents surface control equipment, such as blowout preventers and handling tools; and provides downhole products for producing wells. Drilling Tools International Corporation is headquartered in Houston, Texas.