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Topic: Growth Stocks

BAXTER INTERNATIONAL INC. $72 – New York symbol BAX

BAXTER INTERNATIONAL INC. $72 (New York symbol BAX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 542.0 million; Market cap: $39.0 billion; Priceto- sales ratio: 2.4; Dividend yield: 2.9%; TSINetwork Rating: Average; www.baxter.com) earned $1.35 a share in the three months ended September 30, 2014, up 8.9% from $1.24 a year earlier. Sales rose 13.1%, to $4.2 billion from $3.7 billion.

Baxter’s medical products business (60% of total revenue) reported 17.2% higher sales, thanks to Gambro, a dialysisequipment maker the company bought for $3.9 billion in September 2013. Without Gambro, medical product sales rose 5%.

Sales at the BioScience division (40% of the total) gained 7.5%, mainly due to stronger demand for its Advate hemophilia drug.

The company still plans to split its two divisions into separate companies in mid-2015, when it will hand out shares in the BioScience firm to its investors as a tax-deferred dividend. Companies resulting from breakups like this generally outperform comparable stocks for at least several years after the split takes place.

Baxter is a buy.

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