Hospira, Inc. (HSP): Michael Price Is Bullish on This Drug Manufacturer

Baxter is trading at around $71 per share, with the total market cap of $38.5 billion. The market values Baxter at nearly 13.7 times its forward earnings and 5.5 times its book value. Baxter has a long operating history dated back in 1931, being a globally diversified company, providing its products in more than 100 countries. It has two main business segments: BioScience and Medical Products. The BioScience segment enjoyed a higher operating margin with a pre-tax income of $2.3 billion while Medical Products produced nearly $1.6 billion in pre-tax income in 2012.

Looking forward, Baxter expects that its sales growth will be around 10%, excluding currency exchange impact. The full year 2013 EPS was estimated to stay in the range of $4.60 to $4.70 per share. Income investors might like Baxter with its increasing dividends over the past 10 years. Its dividend has risen from $0.58 per share in 2003 to $1.57 per share in 2012. At the current trading price, Baxter offers investors a decent dividend yield at 2.8%.

Becton, Dickinson and Company is trading at around $100 per share, with the total market cap of $19.44 billion. The market values the company at 15.9 times its forward earnings and 4.2 times its book value. At the current price, the dividend yield stays at 2%. Investors might be bullish on the company due to the fact that its subsidiary, Becton Dickinson (NYSE:BDX) Rx, recently received FDA approval for its second drug in the BD Simplist line of ready-to-administer prefilled generic injectables. It would help clinicians simplify the traditional vial and syringe injection sequence, minimizing the potential medication error. For the full year, the company expected to have 3.5%-4% in revenue. The EPS might experience decent growth of 6.5% to 7% to the range of $5.72 – $5.75 per share.

My Foolish take

Hospira, Inc. (NYSE:HSP)could be considered an opportunistic play on the turnaround after its recent missteps with its lowest book value ratio. Michael Price believed that its EPS could recover to $3 per share. Now selling at 15 times earnings, Hospira could reach $45 per share in the near future.

Anh HOANG has no position in any stocks mentioned. The Motley Fool recommends Becton Dickinson.

The article Michael Price Is Bullish on This Drug Manufacturer originally appeared on Fool.com.

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