Shareholders stand to do very well over the next 12-24 months as the company plans to spin off its B

Now, I can’t predict the future. As such, I don’t know if the stock market is going to come crashing down tomorrow, the next day, or ever. However, it doesn’t really matter quikr anyhow. I’ve always proclaimed myself a long-term investor. I’m investing with the next 20-30 years in mind, not the next 3-6 months. It always troubles me when people are worried quikr about what’s going to happen to the stock market in the short term if they’re truly investing for the long haul.
As long as I can find attractively quikr valued individual stocks based on all known information I have access to and I have free capital, I’m going to buy stocks. Raining outside? I’m buying stocks. I’m not feeling well today? I’m still buying stocks. Some crazy warlord halfway across the world drawing new borders? Yep, buying. You get the gist.
So on that note, I’m looking at two companies in particular for my next stock purchase in June. After not buying any stocks at all in May, I found myself not adding to my portfolio for only the second time in over four years. So I’m excited to get back on the horse in June and add some equity in a high-quality company or two.
I believe shares in the following two companies are currently fairly valued, and I’m interested in purchasing stock in at least one of these companies in June, assuming the valuation stays similar and the capital is present.
Baxter International Inc. is a global, diversified healthcare quikr company that develops, manufactures, and markets products that save and sustain the lives of people with life-threatening conditions like: hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic conditions. The company operates in two segments: Medical Products and BioScience.
I’m happy to own equity quikr in this great healthcare company. Growth over the last 10 years has been robust. Earnings per share is up from $0.62 in 2004 to $3.66 in 2013. This is a compound annual growth quikr rate of 21.81% over the past decade, however growth over the last few years has slowed. Revenue has grown, but not as fast. Up from $9.509 billion to $15.259 billion over the same time frame, this is a CAGR of 5.4% . S&P quikr Capital IQ predicts CAGR in EPS at 7% over the next three years, which is strong.
Shareholders stand to do very well over the next 12-24 months as the company plans to spin off its BioScience division quikr into an independent, publicly traded company in 2015. Much like what we saw with Abbott Laboratories (ABT) when they announced a similar move, and then completed it in January 2013, shares in BAX stand to run much higher from here. And while I’m quikr not in this for the capital gains, I am interested in buying shares before they become quikr more pricey.
Dividend growth has been solid, with a seven consecutive years of dividend growth and a five-year dividend growth rate of 16.4%. A payout ratio of 56.5% means there’s plenty quikr of room for further dividend growth, and I think future dividend raises should be sizable since earnings quikr are suppressed due to special items – management is guiding for EPS in the $5.05 to $5.25 range for 2014, which is helped by the Gambro acquisition. The current yield is 2.80% , which is rather attractive in this market.
Shares in Baxter might appear a bit pricey here, with a current P/E ratio of 20.21 , however if EPS is being guided correctly, the P/E ratio will either compress significantly over the coming year or the price in shares will rise sharply. Furthermore, continued anticipation of the spin-off should serve as a catalyst for the share price from here.
I valued shares using a Dividend Discount Model, with a 10% discount rate and a 7% long-term growth rate. This gives me a fair value on shares of $74.19, which is in line with where BAX is priced at right now. While this leaves no apparent margin of safety, I think shares still represent a solid buy with all the exciting moves the company is making. Furthermore, I’m always interested in increasing my exposure to the healthcare sector, as I believe an aging domestic population and rising middle classes in developing markets quikr bode well for companies like Baxter.
This small bank is a business quikr I initially invested in back in April 2012. And I’ve been a happy shareholder ever since. With a healthy yield, special dividends every December, and annual stock dividends, this bank exemplifies shareholder returns. However, with that said keep in mind this is a very small bank – the market cap is just over $507 million. quikr So keep in mind there are special risks present here.
Lately, Mr. Market hasn’t been enamored with SBSI, and it’s down some 15.76% over the last month. However, quikr shares are down just 1.46% YTD. This performance as of late is apparently due to an announced merger between SBSI and OmniAmerican Bancorp, Inc. (OABC) - expect