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Baxter’s Dividend Soars After Acute Therapies Drive Growth

Baxter International Inc. (BAX) provides a broad portfolio of essential healthcare products, including acute and chronic dialysis therapies, sterile IV solutions, infusion systems and devices, parenteral nutrition therapies, inhaled anesthetics, generic injectable pharmaceuticals, and surgical hemostat and sealant products.

The company generated 31% of its revenue from Renal Care, 22% of its revenue from Medication Delivery, 19% of its revenue from Pharmaceuticals, and the remainder from Clinical Nutrition, Advanced Surgery, Acute Therapies, BioPharma Solutions, and Other during the first quarter of 2021. In terms of geographic diversification, the company generated about 60% of its revenue from international sources and about 40% of its revenue from the United States.

Acute Therapies Drive Q1 Growth

Baxter reported first quarter revenue that rose 5.4% to $2.95 billion, beating consensus estimates by $50 million, along with non-GAAP earnings of 76 cents per share, beating consensus estimates by 11 cents. Looking ahead, management expects FY 2021 adjusted earnings of $3.47 to $3.55 per share versus a $3.40 consensus estimate.

Analysts have mixed opinions following the earnings report. Piper Sandler analyst Matt O’Brien raised his price target but maintained a Neutral rating, citing the slight improvement in sales and earnings guidance that was balanced by a lack of near-term catalysts.

The company raised its quarterly dividend by 14.3% to $0.28 per share, which represents a 1.37% forward yield. The dividend is payable on July 1, 2021 to shareholders on record as of June 4, 2021.

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