Critical Analysis: IDEXX Laboratories (NASDAQ:IDXX) vs. Baxter International (NYSE:BAX)

Baxter International (NYSE:BAX) and IDEXX Laboratories (NASDAQ:IDXX) are both large-cap healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Valuation & Earnings

This table compares Baxter International and IDEXX Laboratories”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baxter International	$11.24 billion	1.08	-$957.00 million	($2.07)	-11.30
IDEXX Laboratories	$4.30 billion	9.51	$1.06 billion	$14.22	36.52

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

Insider and Institutional Ownership

90.2% of Baxter International shares are owned by institutional investors. Comparatively, 87.8% of IDEXX Laboratories shares are owned by institutional investors. 0.2% of Baxter International shares are owned by company insiders. Comparatively, 0.8% of IDEXX Laboratories shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Baxter International and IDEXX Laboratories’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baxter International	-9.27%	16.57%	5.24%
IDEXX Laboratories	25.03%	71.96%	33.60%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Baxter International and IDEXX Laboratories, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baxter International	2	9	2	0	2.00
IDEXX Laboratories	0	4	6	0	2.60

Baxter International presently has a consensus price target of $22.45, suggesting a potential downside of 4.00%. IDEXX Laboratories has a consensus price target of $747.00, suggesting a potential upside of 43.86%. Given IDEXX Laboratories’ stronger consensus rating and higher possible upside, analysts plainly believe IDEXX Laboratories is more favorable than Baxter International.

Risk & Volatility

Baxter International has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, IDEXX Laboratories has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500.

Summary

IDEXX Laboratories beats Baxter International on 12 of the 14 factors compared between the two stocks.

About Baxter International

Baxter International Inc., through its subsidiaries, develops and provides a portfolio of healthcare products worldwide. The company operates through four segments: Medical Products and Therapies, Healthcare Systems and Technologies, Pharmaceuticals, and Kidney Care. The company offers sterile intravenous (IV) solutions; infusion systems and devices; parenteral nutrition therapies; generic injectable pharmaceuticals; surgical hemostat and sealant products, advanced surgical equipment; smart bed systems; patient monitoring and diagnostic technologies; and respiratory health devices, as well as advanced equipment for the surgical space, including surgical video technologies, precision positioning devices, and other accessories. It also provides administrative sets; adhesion prevention products; inhaled anesthesia; drug compounding; chronic and acute dialysis therapies and services, including peritoneal dialysis (PD), hemodialysis (HD), continuous renal replacement therapies (CRRT), and other organ support therapies. The company’s products are used in hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ offices, and patients at home under physician supervision. The company sells its products through direct sales force, as well as through independent distributors, drug wholesalers, and specialty pharmacy or other alternate site providers in approximately 100 countries. It has an agreement with Celerity Pharmaceutical, LLC to develop acute care generic injectable premix and oncolytic products; and a collaborative research agreement with Miromatrix Medical Inc. aiming to advance care for patients with acute liver failure. Baxter International Inc. was incorporated in 1931 and is headquartered in Deerfield, Illinois.

About IDEXX Laboratories

IDEXX Laboratories, Inc. develops, manufactures, and distributes products primarily for the companion animal veterinary, livestock and poultry, dairy, and water testing markets in Africa, the Asia Pacific, Canada, Europe, Latin America, and internationally. The company operates through three segments: Companion Animal Group; Water Quality Products; and Livestock, Poultry and Dairy. It also provides point-of-care veterinary diagnostic products, including instruments, consumables, and rapid assay test kits; veterinary reference laboratory diagnostic and consulting services; practice management and diagnostic imaging systems and services for veterinarians; and health monitoring, biological materials testing, and laboratory diagnostic instruments, and services for biomedical research community. In addition, the company offers diagnostic and health-monitoring products for livestock, poultry, and dairy; products that test water for various microbiological contaminants; point-of-care electrolytes and blood gas analyzers; in-clinic chemistry, blood and urine chemistry, hematology, immunoassay, urinalysis, and coagulation analyzers; and SNAP rapid assays test kits. Further, it provides Colilert, Colilert-18, and Colisure tests, which detect the presence of total coliforms and E. coli in water; Enterolert, Pseudalert, Filta-Max and Filta-Max xpress, Legiolert, and Quanti-Tray products; and veterinary software and services for independent veterinary clinics and corporate groups. Additionally, the company offers human medical point-of-care products and laboratory diagnostics services. The company markets its products through marketing, customer service, sales, and technical service groups, as well as through independent distributors and other resellers. IDEXX Laboratories, Inc. was incorporated in 1983 and is headquartered in Westbrook, Maine.