Baxter International Inc. (BAX), Medtronic, Inc. (MDT): Should You Buy These 2 Medical Device Stocks?

The company also recently gained FDA approval for its AIRvance Bone Screw System, which helps treat obstructive sleep apnea. This came right around the same time that the company gained FDA approval for its Advisa DR MRI SureScan pacing product that enables MRI scans with pacemakers. It is a particularly sensible product for physicians to recommend, since 75% of patients using implanted heart devices require an MRI scan while using the implanted heart device.

At the same time, Medtronic, Inc. (NYSE:MDT) is also expanding their global footprint by purchasing a 26% stake in China’s LifeTech Scientific. This comes at a time when recently released fiscal third quarter EPS of $0.93 came out 2 cents ahead of expectations. Disappointingly, however, revenue is only expected to increase by 3%-4% over the next few months.

Conclusion

Baxter International Inc. (NYSE:BAX) and Medtronic, Inc. (NYSE:MDT) are reasonably priced at a respective 18.5 times and 16.4 times past earnings. The latter is considerably cash rich at a current ratio of 4.6. Medtronic, Inc. (NYSE:MDT) is forecasted for mid-single digit growth, whereas Baxter International Inc. (NYSE:BAX) is forecasted for high single-digit growth. With the market on the rise, I recommend weighting your portfolio more towards undervalued investments, and, hence, preferentially buying more shares in Medtronic, Inc. (NYSE:MDT).

David Gould has no position in any stocks mentioned. The Motley Fool owns shares of Medtronic. David is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Should You Buy These 2 Medical Device Stocks? originally appeared on Fool.com is written by David Gould.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.