BKR’s current portfolio and its planned expansion are well positioned to leverage the rapid changing industry dynamics. The company’s exposure to long cycle LNG operations is poised for growth and the exposure differentiates BKR from its large cap peers. Expected increase in global spending, higher/improving pricing power in North America / Internationally, growing digital penetration, along with its exposure to LNG well positions the company, in our view. Additionally, there has been an overhang of the GE stake sale and the company is prudently managing the same, with the stake at ~11.2% as of February 2022.
It can be expected that BKR is to generate a FCF of ~$5.8 billion in the next three years and anticipate a continued trend of higher shareholder returns. Its strong expected FCF are a core differentiation going forward; this should return in higher dividend payments and share buybacks.