The company has a history of robust performance, which was reinforced by its latest quarterly results. First quarter 2013 saw the company record year-over-year growth of 11% in top line and 12% (before special items) in the bottom line. The company’s historical dividend graph reveals a rising trend in dividend payouts, which have grown at a CAGR of 10.1% over the past decade. An Enterprise value of $29 billion compared to the the current market value of $21 billion indicates strong fundamental value of the company.
The company, with years of experience in this sector, has the right mix of innovative and qualitative research capabilities and a strong balance sheet to support its operations making it one of the leading competitors in this segment.
Grifols SA, Barcelona (NASDAQ:GRFS) is yet another prominent competitor to Baxter. Grifols SA, Barcelona (NASDAQ:GRFS) is a Spanish healthcare company which poses tough competition to Baxter in the bioscience business. Grifols SA, Barcelona (NASDAQ:GRFS) derives close to 88% of its income through its Bioscience operations and has been successful in establishing its leadership in the North American and European markets.
In the wake of rising demand from the Asia Pacific and Latin American regions, the company has braced itself to penetrate these emerging markets. The first quarter of 2013 saw a marked rise in the company’s sales from the emerging markets. As part of its strategy to solidify its foothold in the markets and cater to increasing demands, the company has committed itself to massive investments in capital expenditures aimed at capacity expansion.
Grifols’ other two business drivers are the hospital division and the diagnostic division. While the hospital division accounts for nearly 4% of the total revenue, the diagnostic division accounts for about 4.8% of the total sales generated.
The company recently acquired a 60% stake in Progenica Biopharma. Progenica Biopharma specializes in genomic and proteomic tests, which help in in-vitro diagnosis and prognosis of diseases. The move provides a strategic advantage to the company in terms of access to the latest technology and it strengthens Grifols’ product portfolio offered by the division.
Considering the company’s strategic moves and competitive strengths, Grifols is peddling up the race for market leadership and comes across as a tough challenger to other players in the industry.
Key takeaway for investors
Baxter International Inc. (NYSE:BAX) has been consistently climbing the growth ladder over the past few years and has designed an aggressive strategy aimed at deriving robust long- term growth. The company has capitalized on both organic as well as inorganic growth opportunities to ensure diversification and expansion.
It operates in an extensively competitive environment, and its commitment to research and development will impart a strategic edge against its competitors in the future years. Overall, the company has strong fundamentals, a clear strategy and enormous growth opportunities in the developing markets and is a worthy addition to your portfolio.
The article One Pharma Stock Investors Should Watch originally appeared on Fool.com and is written by Rashmi Singh.
Rashmi Singh has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Rashmi is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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