We recently published a list of 10 Best Energy Dividend 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 energy dividend stocks to buy right now.
The energy sector’s presence within the broader US stock market has fluctuated over time. In the 1970s, it accounted for around 15% of the market, whereas today, it represents just 3.2% of the broader index, as reported by U.S. Bancorp Investments. However, energy consumption has increased since the 1970s, and its significance has not diminished. According to analysts, from an economic standpoint, energy stocks hold a more substantial role in the broader market than their current index weighting suggests.
Towards the end of 2024, energy sector stocks saw considerable fluctuations, rising by over 6% in November before declining nearly 10% in December. By the close of the year, the broader market’s energy sector, which had been up nearly 20% at its highest point, finished 2024 with a return of just 5.72%. This performance fell well behind the wider market. Rob Haworth, senior investment strategy director with U.S. Bank Asset Management, made the following comment about the performance of energy stocks:
“As 2024 came to a close, markets responded to the environment for energy prices. In part, it reflects concern that Oil Petroleum Exporting Countries+ (OPEC+) may soon boost production, which would add to an already solid supply situation. The oil market is one that remains well supplied but isn’t well demanded. Although the U.S. economy is strong, other major oil users like China and Europe are experiencing economic challenges. As a result, global oil demand is lagging.”
Although energy stocks fell short of investor expectations, global investment in the low-carbon energy transition grew by 11% in 2024, reaching a record $2.1 trillion, according to BloombergNEF’s (BNEF) Energy Transition Investment Trends 2025 report. This growth was largely driven by increased investment in electrified transportation, renewable energy, power grids, and energy storage, all of which hit new highs last year. However, while total investment in energy transition technologies set a new record, its growth rate was slower than in the previous three years, when annual increases ranged from 24% to 29%.
BNEF’s report also highlighted a clear divide between investment in well-established and emerging clean energy sectors. Proven technologies with scalable business models—such as renewables, energy storage, electric vehicles, and power grids—accounted for the bulk of 2024’s investment, totaling $1.93 trillion, a 14.7% increase. This growth persisted despite challenges from policy changes, higher interest rates, and an expected slowdown in consumer demand.
Even as oil prices decline, an increasing number of fossil fuel companies are allocating a larger share of their profits to shareholders, indicating a shift in focus away from reinvesting in oilfield development. Some major oil firms have even taken on debt to maintain shareholder payouts. According to Bloomberg, four of the world’s five oil supermajors borrowed a combined $15 billion between July and September 2024 to fund share buybacks, underscoring their commitment to rewarding investors. In addition, companies in the energy sector distributed over $49 billion in dividends during the third quarter of 2024, up from $32.2 billion three years ago, as reported by Janus Henderson.
Our Methodology
For this list, we first scanned Insider Monkey’s database of 900 hedge funds, as of the third quarter of 2024. Our focus was on selecting energy companies across various sectors within the energy industry, including exploration and production, utilities, renewable energy, and oil refining and marketing. From this pool of companies, we identified 10 companies that prioritize distributing dividends to their shareholders and ranked them in ascending order of the number of hedge funds having stakes in them at the end of Q3 2024.
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 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
Is Baker Hughes Company (BKR) The Best Energy Dividend Stock To Buy Right Now?
A drilling rig on a remote oilfield, its tower silhouetted against a setting sunset.
Baker Hughes Company (NASDAQ:BKR) provides oilfield services, products, technology, and systems to the global oil and natural gas sector. With four decades of experience in the LNG industry, the company is well-positioned to capitalize on the growing LNG infrastructure in the US. Recently, the company secured an order from Bechtel Energy to provide gas technology equipment for two liquefaction plants as part of the initial phase of Woodside Energy Group Ltd’s Louisiana LNG development project. In the past 12 months, the stock has surged by over 57%.
Baker Hughes Company (NASDAQ:BKR) reported strong earnings in the fourth quarter of 2024. The company posted revenue of $7.4 billion, which showed an 8% growth from the same period last year. IET secured $3.8 billion in orders during the quarter, driven by robust LNG demand and an additional gas infrastructure contract. With this strong finish to the year, total orders for 2024 reached $13 billion, marking the second-highest annual order volume in the company’s history. This performance underscores the company’s diversified end markets and the adaptability of its portfolio.
Baker Hughes Company (NASDAQ:BKR)’s cash position also remained stable. The company reported an operating cash flow of nearly $1.2 billion in Q4 and its free cash flow amounted to $894 million. On January 30, the company declared a 10% increase in its quarterly dividend to $0.23 per share. This marked the company’s fourth consecutive year of dividend growth, which makes BKR one of the best dividend stocks from the energy sector. The stock supports a dividend yield of 1.99%, as of February 8.
The number of hedge funds tracked by Insider Monkey owning stakes in Baker Hughes Company (NASDAQ:BKR) grew to 45 in Q3 2024, from 41 in the previous quarter. These stakes are collectively valued at over $1.2 billion. Among these hedge funds, AQR Capital Management was the company’s leading stakeholder in Q3.
Overall, BKR ranks 8th on our list of best energy dividend stocks to buy right now. While we acknowledge the potential for BKR as an investment, our conviction lies in the belief that some 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.
