Monday, January 26, 2015

Recent Buy

I just added 14 shares of BAX for a grand cost of $1001.00 ($71/share+7 trading fee). This adds $29.12 to my forward annual dividend. I am still strengthening the core of my portfolio as this is my one and only health care (until JNJ comes down to earth).


Baxter International Inc. develops, manufactures, and markets products for people with hemophilia, immune disorders, infectious diseases, kidney diseases, trauma, and other chronic and acute medical conditions

 Fundamental and premiums.

BAX is currently trading 20x PE, 2.9% and set to spin off its company somewhere mid 2015. S&P capital gives BAX a fair value of $73.70 with a 12-month price target of $90.00. Other analyst gives BAX a 12 month price target of $74.5. Either way I'm below both.

BAX has a Beta of 0.72 and an S&P rating of A.


Baxter has increased its dividends for the past 8 years. It used to be a champion until several spin off froze dividends for a few years.

BAX currently yields 2.9%. It's payout ratio is 59%. It's DGR 3 year is 16.6% and DGR 5 year is 14.2%.

BAX average 5 year yield is 2.5%.

Spin Off

Dividend Engineering has an interesting history of BAX spin off here.

Worst case scenario, BAX will freeze dividends and its new company won't pay dividends. Best case scenario BAX does a 1:1 split and Baxtera will be sold to JNJ in a 1:1 stock swap. A man can dream can't he?


I also flip for 1 more share of GE. This increases my forward income by $0.92. This equal 50 share and the most I'm comfortable with. I'm still suspicious of GE after 2008. In the next crisis, they better cut the CEO pay before the dividends! 

Total: $30.04 increase.

My next purchases will be in my Loyal3 account. Might get some Disney. It's one of those "Set it and you forget it" stock. 

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