Baxter International (BAX), C.R. Bard (BCR), Teva Pharmaceutical (TEVA) and Express Scripts (ESRX) are four health-care stocks likely to outperform in the coming year, even if the global economy remains depressed. The company's geographic reach makes it less dependent on conditions in any one region. Baxter has "good earnings visibility, with little economic sensitivity," says Lai. "They have become less of a distributor of medical equipment like IV supplies, and more of an innovator." Behind that shift is Baxter's bioscience division, whose third-quarter revenue grew 23%, to $1.3 billion. Its products include plasma-based proteins used to treat hemophilia. Another promising area: recombinants, which are produced synthetically, not from human blood, and are used to treat immune disorders. Recombinant sales totaled $516 million in the quarter, versus $432 million a year before. "Between the therapies they have for hemophilia and immune-system-deficient patients, that's a very good market," says Willey. Baxter is also benefiting from a favorable shift in its product mix, as the fastest growth is coming from its more profitable products in biosciences.

20%

Based in Deerfield, Ill., Baxter sweetened its quarterly 20%, to 26 cents a share from 21.75 cents, payable Jan. 6 to holders of record Dec. 10. The ex-date is Dec. 8. This is the third hike since February 2007, and gives the stock a 1.71% yield. Dividends have been ongoing since 1934. Baxter, which set a 52-week high of 71.53 on the Big board Aug. 15, was recently quoted at about 61 and is rated Buy. Third-quarter diluted earnings surged 21%, to 74 cents a share from 61 cents a year earlier. Sales rose 15%, to $3.2 billion. Commenting on the dividend boost, CEO Robert L. Parkinson Jr. said: "Because of the medically necessary nature of our product offerings, diversified business portfolio and extensive global presence, we have the financial strength and flexibility to provide enhanced value to shareholders and invest in future growth despite the uncertain macro environment."

great company with near recession proof market

Competitor

PE of 20, a PEG of 1.55, and it pays a yield of 1.4%.

3 Stocks I Saw on TV: Dan Fitzpatrick examines three stocks viewed on Fast Money. Today's stocks include SPDRs Financials, Baxter Int'l. and Burlington North.

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recent breakout from base, should be short pullback

The healthcare giant said it will repurchase up to $2 billion in common stock to be started once the company's existing share repurchase program is completed. Baxter has less than $700 million of remaining authorization under its previous $2 billion share repurchase program, which it authorized in March 2007, it said.

"We expect to return significant value to shareholders through a disciplined approach to capital allocation and financial management," said Baxter's CFO Robert Davis in a statement about the buyback.

The company is in a very strong position right now and this sentiment was recently backed up by JP Morgan analyst Michael Weinstein who reiterated his Overweight rating.

He said free cash flow would be up more than 20% in 2008 and the company is on solid financial footing right now. He expects that it will increase its dividend and also look to be a player on the M&A market.

Fitch Ratings also reaffirmed its outlook on Baxter, noting that "Baxter will continue to improve profitability through improved product mix, continued cost controls and new product introductions."

Good things for mankind

don't know where it's hitting next