April 15, 2025 a 03:31 pm
BAX: Dividend Analysis - Baxter International Inc.
Baxter International Inc. (BAX) presents a complex dividend profile with both positive and negative indicators to consider. With a dividend yield of 2.67% and 44 years of consistent payouts, the company showcases strong long-term stability. However, recent financial metrics reflect some risks, with negative earnings and high payout ratios. Investors should weigh the historical strength against current financial challenges when evaluating BAX for income-oriented portfolios.
📊 Overview
Examining Baxter's sector and dividend-related metrics provides crucial insights into its shareholder returns.
| Attribute | Value |
|---|---|
| Sector | Healthcare |
| Dividend yield | 2.67% |
| Current dividend per share | 1.16 USD |
| Dividend history | 44 years |
| Last cut or suspension | None |
🗣️ Dividend History
Analyzing the historical dividend payments highlights the company's commitment to returning value to shareholders. Continuous payments for 44 years demonstrate reliability, a key indicator for income-focused investors. Market uncertainties have left no marks on Baxter's consistent payout history, though recent cuts call for cautious optimism.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.17 |
| 2024 | 1.04 |
| 2023 | 1.16 |
| 2022 | 1.15 |
| 2021 | 1.085 |
📈 Dividend Growth
Understanding dividend growth is essential for assessing the sustainability of payout increases. BAX's recent growth rates suggest a cautious outlook amidst financial challenges.
| Time | Growth |
|---|---|
| 3 years | -1.40% |
| 5 years | 4.12% |
The average dividend growth is 4.12% over 5 years. This shows moderate but steady dividend growth, reflecting resilience despite recent financial setbacks.
📉 Payout Ratio
The payout ratio is critical as it indicates the proportion of earnings distributed as dividends. For Baxter, the EPS-based payout is below water, signaling potential sustainability issues.
| Key figure | Ratio |
|---|---|
| EPS-based | -90.91% |
| Free cash flow-based | 104.47% |
The EPS payout ratio of -90.91% suggests negative earnings do not support current payouts. The FCF-based ratio of 104.47% exceeds available cash, requiring caution regarding sustainability.
🔍 Cashflow & Capital Efficiency
Cash flow generation and capital efficiency are measures of financial health. Baxter's current abilities to convert operations into cash are under scrutiny.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.76% | 5.29% | 2.07% |
| Earnings Yield | -2.10% | 13.58% | -9.42% |
| CAPEX to Operating Cash Flow | 43.76% | 40.09% | 56.07% |
| Stock-based Compensation to Revenue | 2.53% | 0.90% | 1.01% |
| Free Cash Flow / Operating Cash Flow Ratio | 54.86% | 59.91% | 43.93% |
Cash flow metrics emphasize marginal stability, though efficiency remains under pressure. Attention should be given to improving the earnings yield to ensure financial flexibility.
📊 Balance Sheet & Leverage Analysis
Optimum leverage is vital to maintain financial health and avoid insolvency risks. Baxter exhibits high leverage ratios, challenging its financial stability.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 191.97% | 170.96% | 295.10% |
| Debt-to-Assets | 51.85% | 50.80% | 60.85% |
| Debt-to-Capital | 65.75% | 63.09% | 74.69% |
| Net Debt to EBITDA | 12.27 | 6.66 | -18.25 |
| Current Ratio | 1.36 | 1.48 | 1.69 |
| Quick Ratio | 1.05 | 1.04 | 1.12 |
| Financial Leverage | 3.70 | 3.37 | 4.85 |
The balance sheet data reflects heavy reliance on leverage, which increases risk if not managed prudently. Maintaining liquidity ratios above industry standard is a positive sign.
💪 Fundamental Strength & Profitability
Strong fundamentals and profitability measures indicate the company's core financial performance and its ability to generate returns. These are critical for long-term investment decisions.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | -4.48% | 31.61% | -41.51% |
| Return on Assets | -1.21% | 9.39% | -8.56% |
| Net Margin | -6.91% | 17.93% | -16.02% |
| EBIT Margin | -2.70% | 2.76% | -14.79% |
| EBITDA Margin | -2.48% | 11.33% | -5.62% |
| Gross Margin | 37.69% | 33.59% | 35.71% |
| R&D to Revenue | 4.01% | 4.50% | 4.00% |
The data outlines fluctuating financial performance. Positive trends in ROE and profitability in 2023 afford some optimism, countered by previous year's negative results.
🖼️ Price Development
✅ Dividend Scoring System
| Criteria | Description | Score |
|---|---|---|
| Dividend yield | Moderate Yield | |
| Dividend Stability | Consistent History | |
| Dividend growth | Steady Ups and Downs | |
| Payout ratio | High and Unstable | |
| Financial stability | High Leverage | |
| Dividend continuity | Proven Track Record | |
| Cashflow Coverage | Some Concerns | |
| Balance Sheet Quality | Leverage Concerns |
Total Score: 45/80 Points
📊 Rating
In conclusion, Baxter International Inc. presents a mixed investment opportunity. Although its long-standing dividend history and moderate yield are appealing for dividend investors, caution is warranted due to high payout ratios and financial stability concerns. The stock may suit risk-tolerant portfolios seeking yield but should be evaluated as part of a diversified investment approach.