Critical Survey: Total Energy Services (OTCMKTS:TOTZF) versus Baker Hughes (NASDAQ:BKR)

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

Insider & Institutional Ownership

92.1% of Baker Hughes shares are held by institutional investors. Comparatively, 61.4% of Total Energy Services shares are held by institutional investors. 0.3% of Baker Hughes shares are held by 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Baker Hughes	7.37%	12.45%	5.25%
Total Energy Services	N/A	N/A	N/A

Dividends

Baker Hughes pays an annual dividend of $0.84 per share and has a dividend yield of 2.3%. Total Energy Services pays an annual dividend of $0.23 per share and has a dividend yield of 3.3%. Baker Hughes pays out 46.9% of its earnings in the form of a dividend. Total Energy Services pays out 15.4% 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. Total Energy Services is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and target prices for Baker Hughes and Total Energy Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baker Hughes	0	2	16	0	2.89
Total Energy Services	0	0	0	0	N/A

Baker Hughes presently has a consensus target price of $43.59, indicating a potential upside of 19.75%. Given Baker Hughes’ higher probable upside, research analysts clearly believe Baker Hughes is more favorable than Total Energy Services.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baker Hughes	$27.03 billion	1.34	$1.94 billion	$1.79	20.34
Total Energy Services	N/A	N/A	N/A	$1.49	4.62

Baker Hughes has higher revenue and earnings than Total Energy Services. Total Energy Services 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 Total Energy Services on 10 of the 12 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 Total Energy Services

Total Energy Services Inc. operates as an energy services company primarily in Canada, the United States, and Australia. It operates through Contract Drilling Services, Rentals and Transportation Services, Compression and Process Services and Well Servicing segments. The Contract Drilling Services segment operates a fleet of various drilling rigs supported by an extensive fleet of owned top drives, walking systems, pumps, and other ancillary equipment. The Rentals and Transportation Services segment provides a fleet of heavy trucks, rental equipment, and access matting in western Canada and in the United States. The Compression and Process Services segment offers natural gas compression equipment, as well as oil, natural gas, and other process equipment. The Well Servicing segment offers well servicing rigs. It also engages in the fabrication, sale, rental, and servicing of new and used natural gas compression, and oil and natural gas process equipment. Total Energy Services Inc. was incorporated in 1996 and is headquartered in Calgary, Canada.