After an impressive 46% gain in 2017, Baxter International (NYSE:BAX) has been relatively quiet so far this year. However, the healthcare stock has easily beaten the performance of the S&P 500 index, moving more than 10% higher year to date, compared to only 1% for the S&P 500.

Thanks to its tremendous 2017 and solid year so far, Baxter stock is now trading at an all-time high. But is the stock a buy?

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Reasons to buy Baxter

Baxter competes in six core markets: renal care, acute therapies, medication delivery, pharmaceuticals, nutrition, and advanced surgery. Sales are growing in all of these areas, but the fastest growth in 2017 was in pharmaceuticals -- which happens to have the largest total addressable market of them all.

The company expects to deliver market-beating revenue growth of around 5% annually over the next five years. Baxter thinks it can achieve this growth in several ways. Most important, the company plans to enter adjacent markets. Baxter's management team projects that these new market opportunities represent at least $6 billion in annual revenue.

One adjacent market looks especially promising. Baxter hopes to leverage its existing infusion operations to enter the market for specialized monitoring. In particular, the company is focusing on noninvasive methods to monitor fluid volume in patients with heart, liver, or renal failure.

Baxter also expects to add around $1.7 billion in additional sales by 2023 by introducing new products. The company's pharmaceuticals business will be a key contributor to this growth, with 67 new molecules anticipated to launch over the next five years, including 22 new anesthesia products.

While these efforts should help grow Baxter's top line, the company is already seeing strong earnings growth. In the first quarter, Baxter reported a 43% year-over-year jump in earnings. While the positive impact from lower U.S. taxes helped, the company also continues to enjoy the effects of its business optimization efforts.

Investors should also like that Baxter is returning cash to them in a couple of ways. The company's dividend yield is only a little over 1%, but Baxter is in a good position to increase the dividend in the future. Baxter bought back over $500 million of its stock during Q1. The company still has $2.1 billion remaining for share buybacks under a repurchase plan authorized by its board of directors in March 2018.

Reasons to stay away

Despite its continued growth, Baxter faces several challenges. Perhaps the most significant right now is that the company faces generic competition in the U.S. for the chemotherapy drug cyclophosphamide.

There's also no guarantee that Baxter will be successful in its efforts to increase revenue. The company is counting heavily on expanding into adjacent markets and launching new products to boost sales over the next five years. Other competitors, however, are either already in these adjacent markets or are also eyeing them. Considerable risks exist with new product development, especially in developing pharmaceuticals.

But even if Baxter doesn't run into any roadblocks on these fronts, there is one other key reason why investors might want to stay away from the stock: It's expensive. Baxter stock currently trades at more than 22 times expected earnings.

Baxter also looks priced for perfection using my favorite valuation metric, enterprise-value-to-EBITDA (EV/EBITDA). I like this metric because it gives a better picture of a company's true value. Baxter's EV/EBITDA multiple is a really high 16.8.

These high valuation multiples might be easier to swallow if Baxter's earnings were likely to skyrocket. The company will probably enjoy strong earnings growth over the next few years, but projected earnings growth isn't enough to make Baxter's valuation look attractive.

Is Baxter a buy?

My view is that Baxter is and will continue to be a solid, reliable company that enjoys success in its core markets. I suspect that Baxter will at least come close to achieving its growth goals by launching new products and entering new markets.

I think Baxter is a good stock, but I don't see it as a great one. The company's growth isn't enough to make it all that attractive to growth-oriented investors. Its dividend yield is too low to excite income-seeking investors. And the stock is way too expensive to appeal to value investors.

Baxter could continue to set all-time high price levels throughout 2018 and beyond. But in my opinion, there are better stocks to buy.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.