Globus Medical (NYSE: GMED) and Baxter International (NYSE:BAX) are both mid-cap medical companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Profitability

This table compares Globus Medical and Baxter International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Globus Medical 17.54% 13.67% 12.35%
Baxter International 9.88% 15.00% 8.12%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Globus Medical and Baxter International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Globus Medical 1 4 7 0 2.50
Baxter International 0 6 5 1 2.58

Globus Medical currently has a consensus target price of $36.83, indicating a potential downside of 4.15%. Baxter International has a consensus target price of $67.55, indicating a potential upside of 5.03%. Given Baxter International’s stronger consensus rating and higher possible upside, analysts clearly believe Baxter International is more favorable than Globus Medical.

Insider and Institutional Ownership

72.2% of Globus Medical shares are held by institutional investors. Comparatively, 84.2% of Baxter International shares are held by institutional investors. 28.2% of Globus Medical shares are held by company insiders. Comparatively, 0.1% of Baxter International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Globus Medical and Baxter International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Globus Medical $563.99 million 6.57 $104.34 million $1.10 34.94
Baxter International $10.16 billion 3.45 $4.97 billion $1.86 34.58

Baxter International has higher revenue and earnings than Globus Medical. Baxter International is trading at a lower price-to-earnings ratio than Globus Medical, indicating that it is currently the more affordable of the two stocks.

Dividends

Baxter International pays an annual dividend of $0.64 per share and has a dividend yield of 1.0%. Globus Medical does not pay a dividend. Baxter International pays out 34.4% of its earnings in the form of a dividend.

Volatility & Risk

Globus Medical has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Baxter International has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Summary

Baxter International beats Globus Medical on 10 of the 17 factors compared between the two stocks.

Globus Medical Company Profile

Globus Medical, Inc. (Globus) is a medical device company focused on the design, development and commercialization of musculoskeletal implants that promote healing in patients with spine disorders. The Company is focused on implants that promote healing in patients with spine disorders. The Company’s products fall into one of two categories: Innovative Fusion or Disruptive Technologies. The Company sells its products through exclusive sales force in the United States, as well as within North, Central & South America, Europe, Asia, Africa and Australia. The sales force consists of direct sales representatives and distributor sales representatives employed by exclusive independent distributors.

Baxter International Company Profile

Baxter International Inc., through its subsidiaries, provides renal and hospital products. The Company operates through two segments: Hospital Products and Renal. Its Hospital Products business manufactures sterile intravenous (IV) solutions and administration sets, premixed drugs and drug-reconstitution systems, pre-filled vials and syringes for injectable drugs, IV nutrition products, parenteral nutrition therapies, infusion pumps, inhalation anesthetics and biosurgery products. The Renal business offers a portfolio to meet the needs of patients with end-stage renal disease, or irreversible kidney disease and acute kidney injuries, including technologies and therapies for peritoneal dialysis (PD), hemodialysis (HD), continuous renal replacement therapy (CRRT) and additional dialysis services. Its products are used by hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors’ offices and by patients at home under physician supervision.

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