Baxter International Inc. (BAX) vs West Pharmaceutical Services, Inc. (WST)

Baxter International Inc. and West Pharmaceutical Services, Inc. are both Medical Instruments & Supplies companies. West Pharmaceutical Services, Inc. is the larger, with a market value of $27.3B against $13.3B — 2.1× the size. Baxter International Inc. has negative trailing earnings, so its P/E is not meaningful; West Pharmaceutical Services, Inc. trades at 43.8×. West Pharmaceutical Services, Inc. grew revenue faster over the last twelve months: 12.6% against 5.33%. West Pharmaceutical Services, Inc. has the higher net margin (18.8% vs −6.23%) and the higher return on invested capital (18.0% vs −1.05%). Both pay a dividend; West Pharmaceutical Services, Inc. yields more (0.22% vs 0.16%). Across the 22 metrics below, West Pharmaceutical Services, Inc. leads on 16 and Baxter International Inc. on 6.

Valuation

Metric BAX WST Medical Instruments & Supplies median
P/E n/m 43.81 30.28
P/S 1.14 8.14 2.49
P/B 2.04 9.32 2.34
Price to free cash flow 11.63 61.53 23.49
EV/EBITDA 13.15 28.41 14.87
EV/Sales 1.71 8.07 2.75
Earnings yield (5.52%) 2.28% 0.00%
Free cash flow yield 8.60% 1.63% 0.59%

Profitability

Metric BAX WST Medical Instruments & Supplies median
Gross margin 30.09% 37.59% 53.60%
Operating margin (1.90%) 22.97% 1.97%
Net margin (6.23%) 18.81% 0.00%
Free cash flow margin 9.79% 13.35% 2.36%
Return on equity (10.56%) 21.23% 0.00%
Return on assets (3.57%) 15.65% 0.00%
Return on invested capital (1.05%) 18.01% 0.13%

Growth

Metric BAX WST Medical Instruments & Supplies median
Revenue growth (TTM) 5.33% 12.55% 8.97%
EPS growth (last fiscal year) (47.24%) 1.49% 6.51%
Revenue growth, 5-year CAGR (0.75%) 7.44% 8.85%
Net income growth, 5-year CAGR 0.00% 7.36% 0.00%

Health

Metric BAX WST Medical Instruments & Supplies median
Debt to equity 1.33 0.07 0.10
Current ratio 1.79 2.82 2.47
Net debt to EBITDA 5.19 (0.78) 0.97

Dividend

Metric BAX WST Medical Instruments & Supplies median
Dividend yield 0.16% 0.22% 1.02%
Payout ratio — 0.10 0.27

Size

Metric BAX WST Medical Instruments & Supplies median
Market cap 13.27b 27.34b 1.71b

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