Baxter International (BAX)
From Cabot Wealth Advisory 3/18/14 Sign up for Cabot Wealth Advisory—it's free!
Baxter International (BAX) fits my screening criteria for undervalued stocks with low volatility and high quality. Baxter is the original producer of commercially prepared intravenous (IV) solutions. Founded in 1931 and headquartered in Deerfield, Illinois, Baxter currently makes and distributes medical products and equipment which focus on blood and the circulatory system. Operations in the U.S. account for 43% sales, Europe 29%, Asia-Pacific 16%, and Latin America and Canada 12%.
Baxter’s BioSciences unit produces various clotting factors for hemophilia, as well as bio-pharmaceuticals for immune deficiencies, cancer, and other disorders. The company’s Medical Products unit makes IV solutions and various specialty products such as pre-filled IV vials and syringes and inhalation anesthetics. Baxter’s Renal Care division produces dialysis equipment and other products for kidney failure patients.
In September 2013, Baxter acquired Gambro AB, a Swedish maker of dialysis care products. Gambro will add $0.20 to 2014 EPS. In addition, Baxter has developed unique intravenous immunoglobulin (IVIG) products which contain new delivery mechanisms and expanded indications.
I expect sales to increase 11% and EPS to rise 8% to 5.12 in 2014. Baxter’s many promising new products are nearing final FDA approval which bodes well for future sales and earnings. At 14.6 times current EPS and with a generous dividend yield of 2.9%, Baxter has paid dividends every year since 1934 and carries a Standard & Poor’s highest Quality Rating of A. Buy BAX at the current price. Sell when BAX reaches my Minimum Sell Price.
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|Baxter International (BAX)
One Baxter Parkway
Deerfield, IL 60015
|Index Membership: N/A
Industry: Medical Instruments & Supplies
Full Time Employees: 61,000