Baxter Int’l (BAX) raises dividend by 23%

Baxter’s (NYSE:BAX) dividend was increased by 23%.  Its overall yield is 1.13%. The firm started paying a dividend in 1980.

Baxter International is a large healthcare firm providing hospital and renal produccts to consumers. The company manufactures medical products across four sizeable business segments including renal, integrated pharmacy, pumps and solutions, and also contract manufacturing. Its large renal segment provides products to treat end-stage renal disease.  The firm was founded in 1931 and is headquartered in Deerfield, Illinois.

Baxter’s three-year growth rate of dividends is -21 percent. This is due to Baxter spinning off its BioScience global biopharmaceutical business into Baxalta two years ago.  Baxter currently ranks 3rd in dividend yield within the large cap healthcare, medical instruments & supplies category. The quarterly dividend for the July payment will be $0.16 versus the prior year rate of $0.13 per share. Baxter is not a member of our Top 100 Dividend Stocks.  (see below).

The dividend will be paid at the new higher rate on July 3, 2017, to shareholders of record at close of business on June 2, 2017. Baxter International Inc. is currently priced at $56.70. Listed in the table below are the quarterly dividend payments since 2010.

Date Quarterly Dividend
6/2/2017 0.16
3/1/2017 0.13
11/30/2016 0.13
8/31/2016 0.13
6/1/2016 0.13
3/2/2016 0.115
12/2/2015 0.115
9/2/2015 0.115
5/28/2015 0.282
3/9/2015 0.282
12/3/2014 0.282
9/3/2014 0.282
6/4/2014 0.282
3/5/2014 0.266
12/4/2013 0.266
9/4/2013 0.266
6/5/2013 0.266
3/6/2013 0.244
12/5/2012 0.244
9/5/2012 0.244
6/6/2012 0.182
3/7/2012 0.182
12/7/2011 0.182
9/7/2011 0.168
6/8/2011 0.168
3/8/2011 0.168
12/8/2010 0.168
9/8/2010 0.158
6/8/2010 0.158
3/8/2010 0.158

Analysis of Baxter is based upon our five key criteria for the Top 100 list, which include;

Category Value Score
Dividend Yield 1.13% 504
Dividend Growth (3-7 year avg) -1 521
Forward P/E 22.50 421
S&P Financial Rating A- 189
Beta 0.85 157
Total Score 1,792
% Yield 3 Year Div. Growth Rate 7 Year Div. Growth Rate SPS 2017 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr low Yield % 5 yr max Yield %
1.13% -21 -1 19.55 2.86 1.30 3.40 0.91% 5.77%

Positives;

  • Baxter maintains an investment grade rating of A-.
  • Baxter maintains a beta of 0.85, lower than the average company.
  • Baxter has paid out a dividend consecutively for the past 37 years.

Negatives;

  • Baxter is trading above its ten-year average price/sales (P/S) ratio.
  • Baxter’s dividend yield is below that of the S&P 500 Index.

Data:

2016 2015 2014 2013 2012
Earnings per Share 1.96 1.38 4.9 4.67 4.53
Annual Dividend 0.49 1.68 2.02 1.88 1.46
Payout Ratio 25.00% 121.74% 41.22% 40.26% 32.23%
Earnings per Share 2017 (projected) 2.25
Dividend 0.61
Payout Ratio 27.11%


Based on the firm’s low dividend yield after the spin-off and elevated price/sales ratio, Baxter International Inc. does not qualify as one of our Top 100 Dividend Stocks

Baxter International Inc. Dividend Yield Chart (Click to enlarge)

Chart Explanation:  Dividend growth stocks may be viewed undervalued when the current yield is above historical readings for the past 5 years.

One thought on “Baxter Int’l (BAX) raises dividend by 23%

  1. Now that is one heck of a dividend increase. That’s what I’m talking about. Would love to see the dividend yield higher though and a decrease in the P/E ratio. seems a little high and there are better values out there with higher yields. But a company I will definitely be keeping an eye on to see if an opportunity presents itself. Thanks for the write-up!

    Bert, One of the Dividend Diplomats

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