We recently published a list of 11 Best Crude Oil Stocks To Buy Right Now. In this article, we are going to take a look at where Baker Hughes Company (NASDAQ:BKR) stands against other best crude oil stocks to buy right now.
Crude oil markets have seen extreme volatility over the past year, fueled by a variety of economic, geopolitical, and supply and demand factors. Prices fell at the end of 2023, when international demand faltered and supply remained strong from key regions, before rebounding in early 2024 as leading oil-producing countries implemented supply cuts to stabilize the market. Meanwhile, demand signals have been mixed — industrial activity in major economies has improved, but high interest rates and inflationary pressures have limited overall energy consumption. After the presidential elections in the US, the Trump 2.0 agenda appears to be driving cracks in the economic outlook, due to a plethora of initiatives such as tariffs, a fight with immigration, and significant cuts in government spending. Despite Republicans notoriously being pro-business and pro-carbon, as confirmed by an announced policy of encouraging energy exploration and production on Federal land and Outer Continental Shelf, the reaction of the stock market has been mixed, as many crude oil stocks have underperformed the broad market in the last couple of months.
The reluctance of the broad market to price in an acceleration in the crude oil space is likely due to expectations of lower oil prices, primarily driven by an uncertain economic and industrial outlook. A slowing economy generally consumes less oil, which coupled with an increasing supply should put downward pressure on prices. Optimism for the year ahead vanished and the outlook has become one of the gloomiest since the pandemic. Companies started to signal widespread concerns about the impact of government policies, ranging from spending cuts to tariffs and geopolitical developments. For instance, the US economic surprise index hit the lowest last week since September, while the business capex forecasts were abruptly cut at the beginning of the year. Small businesses reflect similar signals, by cutting their capex expectations (as per surveys), while consumers report deteriorating financial expectations going forward. All these developments don’t play out in favor of a strong economy in the following quarters.
Financial markets have reflected this turbulence, as energy stocks moved in tandem with the swings in oil prices, which retracted more than 10% since the inauguration day. While refiners and midstream companies have generally performed well due to resilient transportation and processing demand, exploration and production firms have faced challenges in securing new investments. Looking forward, macroeconomic and geopolitical factors will continue to shape the crude oil market. Geopolitical factors, particularly in key oil-producing regions, remain an ongoing concern – with the end of the Ukraine conflict becoming a reality, Russian oil will likely flow more freely abroad, putting even more downward pressure on global prices. Despite the aforementioned headwinds, there are also some positive takeaways for investors – while renewable energy investments continue to grow, the transition remains gradual, ensuring that crude oil will remain a critical component of the global energy mix in the future, especially under the carbon-friendly Trump 2.0 regime. Furthermore, with oil prices declining and many crude oil stocks being down from their mid-2024 highs, the current developments may turn out to be a great long-term buying opportunity.
Our Methodology
We used the Insider Monkey proprietary hedge fund holding database and identified the 11 most popular crude oil companies, ranked by the number of hedge funds that own the stock.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A drilling rig on a remote oilfield, its tower silhouetted against a setting sunset.
Baker Hughes Company (NASDAQ:BKR)
Number of Hedge Fund Holders: 58
Baker Hughes Company (NASDAQ:BKR) is a global leader in oilfield services and energy technology, providing critical equipment and solutions to the oil and gas industry. The company operates across four key segments: Oilfield Services & Equipment, Industrial & Energy Technology, Turbomachinery & Process Solutions, and Digital Solutions. With a presence in over 120 countries, BKR supports both upstream and downstream operations, offering services such as drilling, completions, production optimization, and LNG infrastructure. While its core business remains deeply tied to crude oil and natural gas development, the company is also investing in emerging energy technologies, including carbon capture, hydrogen, and geothermal solutions.
Baker Hughes Company (NASDAQ:BKR) delivered strong Q4 results, exceeding EBITDA guidance for the eighth consecutive quarter and setting new quarterly and annual records for revenue, free cash flow, adjusted EPS, EBITDA, and EBITDA margin. The company’s adjusted EPS increased 37% YoY and grew 47% for the full year. Company adjusted EBITDA margins expanded by 1.8 percentage points YoY to reach a record of 17.8%. The company generated a strong free cash flow of $894 million during the quarter, resulting in a record annual free cash flow of $2.3 billion, representing a conversion rate of 49%.
Looking forward to 2025, Baker Hughes Company (NASDAQ:BKR) anticipates more than 80 million tons per annum (MTPA) of LNG FIDs in 2025 and 2026, supported by a record year of offtake contracting in 2024 which totaled 92 MTPA. The company expects global upstream spending to be down slightly in 2025, with North American spending decreasing YoY in the mid-single-digit range. In international markets, spending is expected to be flat to down YoY, with bright spots in Brazil, the Middle East outside of Saudi Arabia, and Sub-Saharan Africa. The company remains confident in achieving its margin targets and sees the 20% margin level as a milestone rather than a final destination. With that being said, management seems confident in the future, and the recent strong results further reinforce the optimistic outlook.
Overall, BKR ranks 8th on our list of best crude oil stocks to buy right now. While we acknowledge the potential of BKR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BKR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
