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 $27.0B against $13.3B — 2.0× the size. Baxter International Inc. has negative trailing earnings, so its P/E is not meaningful; West Pharmaceutical Services, Inc. trades at 48.7×. West Pharmaceutical Services, Inc. grew revenue faster over the last twelve months: 12.4% against 5.36%. West Pharmaceutical Services, Inc. has the higher net margin (17.0% vs −9.27%) and the higher return on invested capital (15.4% vs −1.27%). Both pay a dividend; West Pharmaceutical Services, Inc. yields more (0.23% 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 48.66 33.75
P/S 1.14 8.15 2.52
P/B 2.12 9.07 2.48
Price to free cash flow 16.07 62.60 25.19
EV/EBITDA 14.03 31.19 14.62
EV/Sales 1.78 8.08 2.88
Earnings yield (8.17%) 2.06% (2.67%)
Free cash flow yield 6.22% 1.60% 0.09%

Profitability

Metric BAX WST Medical Instruments & Supplies median
Gross margin 30.08% 36.79% 54.29%
Operating margin (2.39%) 20.45% 1.07%
Net margin (9.27%) 16.98% (1.61%)
Free cash flow margin 7.11% 13.13% 1.08%
Return on equity (15.78%) 19.09% (1.32%)
Return on assets (5.21%) 14.07% 0.00%
Return on invested capital (1.27%) 15.42% 0.00%

Growth

Metric BAX WST Medical Instruments & Supplies median
Revenue growth (TTM) 5.36% 12.38% 8.85%
EPS growth (last fiscal year) (47.24%) 1.49% 8.65%
Revenue growth, 5-year CAGR (0.75%) 7.44% 9.17%
Net income growth, 5-year CAGR 0.00% 7.36% 0.00%

Health

Metric BAX WST Medical Instruments & Supplies median
Debt to equity 1.53 0.07 0.10
Current ratio 1.95 2.82 2.48
Net debt to EBITDA 5.19 (0.78) 0.89

Dividend

Metric BAX WST Medical Instruments & Supplies median
Dividend yield 0.16% 0.23% 1.11%
Payout ratio — 0.11 0.27

Size

Metric BAX WST Medical Instruments & Supplies median
Market cap 13.32b 26.96b 619.84m

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