Becton, Dickinson and Company (BDX), a medical technology company, develops, manufactures and sells medical devices, instrument systems, and reagents worldwide. The medical segment of BD is engaged in the business of manufacturing needles, syringes and medical trays, whereas other departments in BD engage in the fields of Biosciences and diagnostics.
In a sense, BD is the 'Gillette' of the medical world: it focuses on daily, easy-to-use disposable stuff like needles and syringes, and its consumer base, big hospitals and medical centers, is tied to its competitive supply chain. Unlike Gillette, BD operates in the 'not-very-hot' field of medical devices' supply. It is normally a grayish field with no glamor or spotlight success.
But no glamor does not mean no profits. BD has been consistently delivering handsome returns to its investors. Let's take a hard look at the numbers:
- Operating profit for the quarter ending on June 30th, 2011 had increased by 15% in comparison to September 30th, 2010 , to reach $471ML, while Net income from continuing operations for the same period increased by 10% to $338ML.
- Gross margin and operating margin of BD are an astounding 52% and 23%, respectively. That is pretty impressive even for a medical company.
- Return on Equity (ROE) stands at 24% and the overall Return on Investment (ROI) stands at 15%.
- Due to the global sales and marketing network of BD, any investor in the company ultimately receives global currency exposure rather than just sticking with the green buck.
- Since BD has sales in multiple continents, an investor avoids getting hit hard by a temporary slow business cycle in a specific part of the globe.
- BD is a dividend aristocrat having paid dividends to its investors for over 30 consecutive years. Not only that, BD has been constantly increasing its dividend payout in an annual rate of 14.5%.
Disclosure: I am long BDX.