Analyzing Baxter International (BAX) & Stryker (SYK)
Baxter International (NYSE:BAX) and Stryker (NYSE:SYK) are both large-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitability, valuation and earnings.
Insider & Institutional Ownership
83.4% of Baxter International shares are held by institutional investors. Comparatively, 74.7% of Stryker shares are held by institutional investors. 0.1% of Baxter International shares are held by company insiders. Comparatively, 7.4% of Stryker shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Baxter International pays an annual dividend of $0.76 per share and has a dividend yield of 1.1%. Stryker pays an annual dividend of $1.88 per share and has a dividend yield of 1.1%. Baxter International pays out 30.6% of its earnings in the form of a dividend. Stryker pays out 29.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Stryker has raised its dividend for 7 consecutive years.
This table compares Baxter International and Stryker’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
Baxter International has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, Stryker has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.
This is a breakdown of current recommendations for Baxter International and Stryker, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Baxter International currently has a consensus target price of $74.63, indicating a potential upside of 10.95%. Stryker has a consensus target price of $181.86, indicating a potential upside of 5.58%. Given Baxter International’s higher possible upside, analysts plainly believe Baxter International is more favorable than Stryker.
Earnings & Valuation
This table compares Baxter International and Stryker’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Baxter International||$10.56 billion||3.39||$717.00 million||$2.48||27.12|
|Stryker||$12.44 billion||5.18||$1.02 billion||$6.49||26.54|
Stryker has higher revenue and earnings than Baxter International. Stryker is trading at a lower price-to-earnings ratio than Baxter International, indicating that it is currently the more affordable of the two stocks.
Stryker beats Baxter International on 11 of the 17 factors compared between the two stocks.
Baxter International Company Profile
Baxter International Inc. provides a portfolio of healthcare products. The company operates through North and South America; Europe, Middle East and Africa; and Asia-Pacific segments. It offers peritoneal dialysis and hemodialysis, and additional dialysis therapies and services; renal replacement therapies and other organ support therapies focused in the intensive care unit; sterile intravenous (IV) solutions, IV therapies, infusion pumps, administration sets, and drug reconstitution devices; and parenteral nutrition therapies. The company also provides biological products and medical devices, and surgical hemostat and sealant products used in surgical procedures for hemostasis, tissue sealing, and adhesion prevention; premixed and oncology drug platforms, inhaled anesthesia and critical care products, and pharmacy compounding services; and generic injectable pharmaceuticals. Its products are used in hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors' offices, and by patients at home under physician supervision. The company sells its products through direct sales force, independent distributors, drug wholesalers, and specialty pharmacy or other alternate site providers in approximately 100 countries. It has an agreement with Celerity Pharmaceutical, LLC to develop acute care generic injectable premix and oncolytic molecules. Baxter International Inc. was founded in 1931 and is headquartered in Deerfield, Illinois.
Stryker Company Profile
Stryker Corporation operates as a medical technology company. The company operates through three segments: Orthopaedics, MedSurg, and Neurotechnology and Spine. The Orthopaedics segment provides implants for use in hip and knee joint replacements, and trauma and extremities surgeries. The MedSurg segment offers surgical equipment and surgical navigation systems, endoscopic and communications systems, patient handling, emergency medical equipment and intensive care disposable products, reprocessed and remanufactured medical devices, and other medical devices for use in various medical specialties. The Neurotechnology and Spine segment provides neurotechnology products that include products used for minimally invasive endovascular techniques; products for brain and open skull based surgical procedures; orthobiologic and biosurgery products, such as synthetic bone grafts and vertebral augmentation products; and minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke. It also provides spinal implant products comprising cervical, thoracolumbar, and interbody systems for use in spinal injury, deformity, and degenerative therapies. The company sells its products to doctors, hospitals, and other healthcare facilities through company-owned sales subsidiaries and branches, as well as third-party dealers and distributors in approximately 85 countries. Stryker Corporation was founded in 1941 and is headquartered in Kalamazoo, Michigan.
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