Alcoa vs Baxter International Which Offers More Value?

Alcoa and Baxter International are two companies in the industrial sector that offer investors the opportunity to diversify their portfolios and potentially achieve strong returns. Alcoa is a leading producer of aluminum products, while Baxter International focuses on healthcare solutions. Both companies have demonstrated strong financial performance and consistent growth over the years, making them attractive options for investors seeking stability and reliability in their investments. By comparing the performance and characteristics of these two stocks, investors can make informed decisions to capitalize on potential opportunities in the market.

Alcoa or Baxter International?

When comparing Alcoa and Baxter International, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Alcoa and Baxter International.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Alcoa has a dividend yield of 1.23%, while Baxter International has a dividend yield of 3.56%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Alcoa reports a 5-year dividend growth of 0.00% year and a payout ratio of -27.74%. On the other hand, Baxter International reports a 5-year dividend growth of 9.71% year and a payout ratio of 23.79%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Alcoa P/E ratio at -32.25 and Baxter International's P/E ratio at 6.72. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Alcoa P/B ratio is 1.79 while Baxter International's P/B ratio is 2.18.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Alcoa has seen a 5-year revenue growth of -0.18%, while Baxter International's is 0.40%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Alcoa's ROE at -6.71% and Baxter International's ROE at 30.64%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $40.32 for Alcoa and $32.62 for Baxter International. Over the past year, Alcoa's prices ranged from $23.80 to $46.55, with a yearly change of 95.59%. Baxter International's prices fluctuated between $32.48 and $44.01, with a yearly change of 35.50%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.