Baxter International Inc

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BAX : NYSE : Health Care
$47.18 | %
Today's Range: 46.92 - 47.54
Avg. Daily Volume: 3,988,200
08/26/16 - 4:01 PM ET

Financial Analysis


BAXTER INTERNATIONAL INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. BAXTER INTERNATIONAL INC has average liquidity. Currently, the Quick Ratio is 1.19 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 6.52% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)2585.02475.0
EBITDA ($mil)482.0324.0
EBIT ($mil)276.0134.0
Net Income ($mil)1212.0332.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)2630.06680.0
Total Assets ($mil)15982.030015.0
Total Debt ($mil)3168.014218.0
Equity ($mil)8509.07988.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin50.149.05
EBITDA Margin18.6413.09
Operating Margin10.685.41
Sales Turnover0.630.35
Return on Assets30.027.27
Return on Equity56.226.38
Debt Q2 FY16 Q2 FY15
Current Ratio1.832.3
Debt/Capital0.270.64
Interest Expense16.036.0
Interest Coverage17.253.72


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)542.36545.2
Div / share0.130.52
EPS2.190.13
Book value / share15.6914.65
Institutional Own % n/a n/a
Avg Daily Volume4654375.09483484.0

Valuation


BUY. BAXTER INTERNATIONAL INC's P/E ratio indicates a significant discount compared to an average of 43.46 for the Health Care Equipment & Supplies industry and a significant discount compared to the S&P 500 average of 25.30. To use another comparison, its price-to-book ratio of 3.06 indicates valuation on par with the S&P 500 average of 2.83 and a significant discount versus the industry average of 4.88. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, BAXTER INTERNATIONAL INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
BAX 5.55 Peers 43.46   BAX 20.26 Peers 28.67

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

BAX is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

BAX is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
BAX 24.25 Peers 24.34   BAX 0.04 Peers 0.83

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

BAX is trading at a premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

BAX trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
BAX 3.06 Peers 4.88   BAX 840.21 Peers 19.39

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

BAX is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

BAX is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
BAX 2.59 Peers 14.87   BAX -3.15 Peers 21.00

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

BAX is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

BAX significantly trails its peers on the basis of sales growth

 

 

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