Baxter International (BAX) & LivaNova (LIVN) Critical Comparison

Baxter International (NYSE: BAX) and LivaNova (NASDAQ:LIVN) are both healthcare companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Profitability

This table compares Baxter International and LivaNova’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Baxter International 6.79% 15.12% 8.23%
LivaNova 4.63% 9.33% 6.82%

Earnings and Valuation

This table compares Baxter International and LivaNova’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Baxter International $10.56 billion 3.32 $717.00 million $1.30 49.47
LivaNova $1.21 billion 3.27 -$62.78 million $1.17 70.34

Baxter International has higher revenue and earnings than LivaNova. Baxter International is trading at a lower price-to-earnings ratio than LivaNova, indicating that it is currently the more affordable of the two stocks.

Dividends

Baxter International pays an annual dividend of $0.64 per share and has a dividend yield of 1.0%. LivaNova does not pay a dividend. Baxter International pays out 49.2% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and price targets for Baxter International and LivaNova, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Baxter International 0 5 8 1 2.71
LivaNova 1 2 4 0 2.43

Baxter International presently has a consensus target price of $70.92, indicating a potential upside of 10.27%. LivaNova has a consensus target price of $78.17, indicating a potential downside of 5.02%. Given Baxter International’s stronger consensus rating and higher probable upside, analysts clearly believe Baxter International is more favorable than LivaNova.

Institutional and Insider Ownership

83.5% of Baxter International shares are owned by institutional investors. Comparatively, 88.5% of LivaNova shares are owned by institutional investors. 0.1% of Baxter International shares are owned by insiders. Comparatively, 0.3% of LivaNova shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Baxter International has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, LivaNova has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Summary

Baxter International beats LivaNova on 13 of the 17 factors compared between the two stocks.

About Baxter International

Baxter International Inc., through its subsidiaries, provides renal and hospital products. The Company operates through two segments: Hospital Products and Renal. Its Hospital Products business manufactures sterile intravenous (IV) solutions and administration sets, premixed drugs and drug-reconstitution systems, pre-filled vials and syringes for injectable drugs, IV nutrition products, parenteral nutrition therapies, infusion pumps, inhalation anesthetics and biosurgery products. The Renal business offers a portfolio to meet the needs of patients with end-stage renal disease, or irreversible kidney disease and acute kidney injuries, including technologies and therapies for peritoneal dialysis (PD), hemodialysis (HD), continuous renal replacement therapy (CRRT) and additional dialysis services. Its products are used by hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors’ offices and by patients at home under physician supervision.

About LivaNova

LivaNova PLC is a medical device company focused on the development and delivery of therapeutic solutions. The Company’s segments include Cardiac Surgery, Cardiac Rhythm Management, Neuromodulation and Other. The Cardiac Surgery segment is engaged in the development, production and sale of cardiovascular surgery products. Cardiac Surgery products include oxygenators, heart-lung machines, autotransfusion, mechanical heart valves and tissue heart valves. The Cardiac Rhythm Management segment is engaged in the development, manufacturing and marketing of products for the diagnosis, treatment, and management of heart rhythm disorders and heart failure. Cardiac Rhythm Management products include high-voltage defibrillators Cardiac Resynchronization Therapy device (CRT-D) and low-voltage pacemakers. The Neuromodulation segment is engaged in the design, development and marketing of neuromodulation therapy for the treatment of drug-resistant epilepsy and treatment resistant depression.

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