Head-To-Head Comparison: Solaris Energy Infrastructure (NASDAQ:SEI) versus Baker Hughes (NASDAQ:BKR)

Solaris Energy Infrastructure (NASDAQ:SEI) and Baker Hughes (NASDAQ:BKR) are both companies in the oil and energy sector. This article will examine various aspects of these two firms to determine which one stands out as a superior business. We will analyze their earnings, dividends, profitability, institutional ownership, risk factors, analyst recommendations, and overall valuation.

Profitability

When comparing the profitability of Solaris Energy Infrastructure and Baker Hughes, we look at key metrics such as net margins, return on equity, and return on assets. The following table illustrates these figures:

	Net Margins	Return on Equity	Return on Assets
Solaris Energy Infrastructure	4.80%	6.66%	4.12%
Baker Hughes	10.70%	14.58%	6.30%

Baker Hughes shows stronger profitability with higher net margins, return on equity, and return on assets compared to Solaris Energy Infrastructure.

Analyst Recommendations

The following table summarizes the recent analyst ratings for both Solaris Energy Infrastructure and Baker Hughes, including their target prices:

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Solaris Energy Infrastructure	0	0	5	1	3.17
Baker Hughes	0	2	17	0	2.89

Analysts have set a consensus target price of $45.75 for Solaris Energy Infrastructure, which indicates a potential upside of 41.43%. For Baker Hughes, the consensus target price is $51.06, representing a potential upside of 15.94%. These insights suggest that analysts favor Solaris Energy Infrastructure slightly due to its higher expected upside.

Insider & Institutional Ownership

Insider and institutional ownership can give indications about the confidence in a company. Currently, 67.4% of Solaris Energy Infrastructure shares are held by institutional investors, whereas 92.1% of Baker Hughes shares are owned by institutions. Additionally, 34.7% of Solaris Energy Infrastructure shares are owned by insiders, compared to just 0.3% for Baker Hughes. Higher institutional ownership often suggests strong belief in a company's future performance.

Earnings and Valuation

Next, we evaluate the earnings and valuation metrics of both companies:

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Solaris Energy Infrastructure	$280.14 million	7.75	$24.34 million	$0.44	73.52
Baker Hughes	$27.83 billion	1.57	$2.98 billion	$2.98	14.78

Baker Hughes leads in both revenue and net income, and it is trading at a significantly lower price-to-earnings ratio than Solaris Energy Infrastructure, indicating a more affordable investment.

Dividends

Analyzing dividends, Solaris Energy Infrastructure offers an annual dividend of $0.48 per share, yielding 1.5%. In comparison, Baker Hughes pays a $0.92 annual dividend per share, resulting in a 2.1% yield. Of concern is that Solaris Energy Infrastructure distributes 109.1% of its earnings as dividends, suggesting potential future sustainability risks. Baker Hughes, however, pays out only 30.9% of its earnings, making it a more dependable choice for income investors.

Volatility and Risk

In terms of stock price volatility, Solaris Energy Infrastructure has a beta of 1.35, indicating it is 35% more volatile than the S&P 500. In contrast, Baker Hughes has a beta of 1.39, indicating a 39% increase in volatility compared to the S&P 500. Both companies show similar risk profiles, with Baker Hughes being slightly more volatile.

Summary

Overall, Baker Hughes outperforms Solaris Energy Infrastructure on 11 out of 17 factors analyzed. This indicates that while Solaris Energy Infrastructure has some favorable aspects, particularly in ratings and potential growth, Baker Hughes presents a stronger overall profile concerning financial performance and reliability.

About Solaris Energy Infrastructure

Solaris Energy Infrastructure, Inc. is a holding company focused on innovative mobile proppant management systems optimized for oil and gas well sites. Founded in 2014, the company is headquartered in Houston, Texas.

About Baker Hughes

Baker Hughes Company offers a variety of technologies and services in the energy and industrial sectors. This Houston-based firm provides comprehensive offerings in oilfield services and equipment, as well as industrial energy technology. Formerly part of General Electric, Baker Hughes became a standalone entity in 2019.

Solaris, BakerHughes, Energy