ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Baxter International's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 1.71%.
As of today (2026-06-26), Baxter International's WACC % is 6.94%. Baxter International's ROIC % is 1.16% (calculated using TTM income statement data).
Baxter International earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Baxter International (MEX:BAX) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Baxter International's WACC % is 6.94%. Baxter International's ROIC % is 1.16% (calculated using TTM income statement data).
Baxter International earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Medical Instruments & Supplies subindustry, Baxter International's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Baxter International ROIC % vs Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, Baxter International's ROIC % distribution charts can be found below:
* The bar in red indicates where Baxter International's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Baxter International (MEX:BAX) has a ROIC % of 1.71% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Baxter International and its competitors.
Is Baxter International's ROIC % too high?
Baxter International's current ROIC % is 1.71%. The Medical Devices & Instruments industry median ROIC % is 1.26. Baxter International's value of 1.71% is 35.7% above this industry median. Overall, Baxter International has a GF Score™ of 44/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Baxter International's ROIC % compare to COO and ATR?
Baxter International's ROIC % of 1.71% can be compared against companies in the Medical Devices & Instruments industry. The industry median ROIC % is 1.26. Baxter International's value of 1.71% is 35.7% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Medical Devices & Instruments company?
The median ROIC % among Medical Devices & Instruments companies is 1.26, based on 847 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Baxter International's current ROIC % of 1.71% is 35.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Baxter International and its competitors. For the Medical Devices & Instruments industry, the median ROIC % is 1.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Baxter International's current ROIC % is 1.71%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Baxter International stock overvalued right now?
Based on GuruFocus' analysis, Baxter International (MEX:BAX) is currently considered Possible Value Trap. The stock's GF Value™ is MXN624.41, compared to a current price of MXN368.89 — trading 40.9% below its estimated fair value. The current ROIC % is 1.71% and 35.7% above the Medical Devices & Instruments industry median of 1.26. Baxter International's overall GF Score™ is 44/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Baxter International (MEX:BAX), the current ROIC % is 1.71% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Baxter International (MEX:BAX) Overvalued in 2026?
Based on GuruFocus' analysis, Baxter International stock appears to be undervalued.
The current stock price of MXN368.89 is trading 40.9% below its estimated GF Value™ of MXN624.41.
GuruFocus considers Baxter International to be Possible Value Trap.
Key valuation signals for MEX:BAX:
ROIC %: 1.71%
GF Value™: MXN624.41 vs. price of MXN368.89 (40.9% below fair value)
Industry Position: 35.7% above the Medical Devices & Instruments median
No single metric tells the full story. See the MEX:BAX stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Baxter offers a variety of medical supplies and equipment to providers. From its legacy operations, Baxter sells injectable therapies for use in care settings, including IV pumps, administrative sets, and solutions; nutritional products; and surgical sealants and hemostatic agents. Baxter expanded its portfolio of hospital-focused offerings by acquiring Hillrom in late 2021, which added basic equipment like hospital beds, operating room equipment, and patient monitoring tools to the portfolio. Baxter also sold its kidney care tools in early 2025.
44GF Score
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