Less risky than it looks

Article Excerpt

BAXTER INTERNATIONAL INC. $48 (New York symbol BAX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 584.4 million; Market cap: $28.1 billion; Price-to-sales ratio: 2.3; Dividend yield: 2.4%; WSSF Rating: Average) gets over half of its revenue from medical products that can only be used once. Like Beckman, this gives it steady revenue streams. As well, Baxter’s wide range of products limits its reliance on a single product or region. It has three divisions: BioScience (about 44% of 2009 sales), makes vaccines and drugs; Medical Delivery (37%) makes intravenous equipment; and Renal (18%) makes dialysis equipment. These strengths will help Baxter overcome several challenges. For example, the weak economy is prompting hospitals to switch to cheaper alternatives to Baxter’s products. The company has cut its prices in response. As well, Baxter is recalling its Colleague infusion pumps because of a defect that could cause patients to receive too much medication. It will replace these pumps with newer models, or offer refunds. This…