We believe Stryker stock (NYSE: SYK) is a better pick in the Medical Devices industry than Baxter stock (NYSE: BAX), given its better prospects. Although SYK trades at a superior valuation of 5.5x trailing revenues vs. 1.4x for BAX, this gap in valuation makes sense to a large extent, given the former’s better profitability and financial position, as discussed below.
Looking at stock returns, SYK has fared much better with 13% returns this year vs. -20% returns for BAX and 9% gains for the broader S&P500 index. There is more to the comparison, and in the sections below, we discuss why we believe that SYK will offer better returns than BAX in the next three years. We compare a slew of factors, such as historical revenue growth, returns, and valuation, in an interactive dashboard analysis of Stryker vs. Baxter: Which Stock Is A Better Bet? Parts of the analysis are summarized below.
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