November 09, 2025 a 07:31 am
BAX: Dividend Analysis - Baxter International Inc.
Baxter International Inc. presents an intriguing dividend profile, marked by a historic resilience in its dividend history but coupled with concerning financial indicators. Despite its impressive 44-year history of dividend payouts, recent trends indicate challenges, including negative earnings and concerning payout ratios. Investors should carefully consider the sustainability of the current dividend policy in light of these challenges, particularly the negative dividend growth over the past three years.
📊 Overview
The overview of Baxter International Inc. highlights its sectoral positioning and key dividend parameters. While the company operates in a robust sector, the current dividends and yield reflect both opportunity and caution, given the historical longevity of payouts but recent performance challenges.
| Metric | Value |
|---|---|
| Sector | Healthcare |
| Dividend Yield | 2.75 % |
| Current Dividend per Share | 1.16 USD |
| Dividend History | 44 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
Baxter's longstanding commitment to dividends is evident in its 44-year streak. However, consistent dividends may mask underlying challenges, emphasized by recent reductions in dividend growth rates. The historical performance is a double-edged sword, highlighting reliability amidst potential financial strain.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.51 |
| 2024 | 1.04 |
| 2023 | 1.16 |
| 2022 | 1.15 |
| 2021 | 1.085 |
📈 Dividend Growth
The growth analysis of Baxter's dividends over multiple years is crucial to understanding its future trajectory. A 3-year decline juxtaposes a modest 5-year growth, indicating volatility. While the total 5-year growth rate suggests progress, its diminutive percentage points towards the necessity for strategic financial review.
| 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, though recent declines raise concerns.
⚠️ Payout Ratio
Payout ratios provide insight into the sustainability of dividend payments relative to company earnings and free cash flow. Baxter exhibits troubling figures, with significant negative payout ratios in both EPS and FCF terms. This indicates potential unsustainability in maintaining the current dividend levels without improved profitability or cash flow.
| Key figure | Ratio |
|---|---|
| EPS-based | -174.38 % |
| Free cash flow-based | -2702.83 % |
The negative payout ratios, notably -174.38 % (EPS) and -2702.83 % (FCF), highlight concerns about the ongoing viability of dividend distributions in light of current earnings and cash flows.
✅ Cashflow & Capital Efficiency
Analyzing the cashflow and capital efficiency is pivotal for evaluating operational liquidity and return opportunities. Baxter's current metrics reflect challenges, particularly in free cash flow yield, necessary for sustainable dividend and operational stability.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.76% | 6.59% | 2.24% |
| Earnings Yield | -4.36% | 13.58% | -9.47% |
| CAPEX to Operating Cash Flow | 45.14% | 25.26% | 52.44% |
| Stock-based Compensation to Revenue | 1.08% | 1.11% | 1.39% |
| Free Cash Flow / Operating Cash Flow Ratio | 54.86% | 74.74% | 47.56% |
The remarkably varied FCF yields highlight variable capital efficiency. Stability improvements could better link capital allocation with operational cash flows to drive growth and ensure dividend sustainability.
📉 Balance Sheet & Leverage Analysis
Examining the balance sheet and leverage metrics is critical for understanding the company's financial health and risk exposure. Current ratios suggest elevated risks, indicated by strained leverage ratios and challenged debt management capabilities.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.93 | 1.68 | 2.95 |
| Debt-to-Assets | 52.16% | 49.91% | 60.82% |
| Debt-to-Capital | 65.88% | 62.68% | 74.68% |
| Net Debt to EBITDA | 10.47 | 6.36 | -8.78 |
| Current Ratio | 1.36 | 1.48 | 1.69 |
| Quick Ratio | 1.05 | 1.18 | 1.12 |
| Financial Leverage | 3.70 | 3.36 | 4.85 |
The high leverage ratios underscore the financial risk associated with the company's current debt levels. These figures necessitate careful monitoring to maintain financial flexibility and ensure operational continuity.
✅ Fundamental Strength & Profitability
Evaluating fundamental and profitability ratios provides insight into the operational viability and strategic strength of Baxter. The marginal negative margins and returns signal operational underperformance requiring strategic adjustments for competitive positioning and long-term growth.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | -9.32% | 31.61% | -41.71% |
| Return on Assets | -2.52% | 9.39% | -8.60% |
| Margins: Net | -6.10% | 25.64% | -24.19% |
| EBIT Margin | 1.12% | 7.24% | -28.19% |
| EBITDA Margin | 10.49% | 16.74% | -17.53% |
| Gross Margin | 37.46% | 40.06% | 35.29% |
| Research & Development to Revenue | 5.47% | 5.00% | 4.47% |
Fluctuations in profitability ratios indicate operational challenges that require strategic interventions to sustain competitive advantage and shareholder value.
✅ Price Development
🗣️ Dividend Scoring System
Below is the scoring for Baxter International Inc. based on its dividend's attractiveness and associated financial health.
| Category | Score | |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 2 | |
| Dividend Growth | 1 | |
| Payout Ratio | 1 | |
| Financial Stability | 2 | |
| Dividend Continuity | 3 | |
| Cashflow Coverage | 2 | |
| Balance Sheet Quality | 2 |
Overall Score: 16/40
🗣️ Rating
Baxter International Inc. currently exhibits a mid-range dividend profile. While its historical consistency in dividend payouts provides some level of investor confidence, its current financial metrics suggest caution. Investors seeking stable dividend yields should consider the company's broader operational strategies and financial health to evaluate the sustainability of future dividend growth.