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  • Becton Dickinson Dividend Stock Analysis [View article]
    generally true when time horizon is infinity, but in the short/medium term, a company can sustain above earnings growth dividend increases when payout ratio is low. MCD is a good example looking back 10 years where stock has gone up as well even tho their div has far outpaced EPS. INTC is another one where stock has languished a bit more.

    in BDX case, its not like their earnings growth is going to 0. its slowing like any mature business does. they'll still be able to grow organically, thru pricing power, as well as do bolt on acquisitions. between those 3, even if they grow earnings at 5-7% rate, it allows them to increase the dividend at 10% per year for many years. their payout rate is only 35-40%.
    Jan 6, 2013. 12:46 AM | 3 Likes Like |Link to Comment
  • Becton Dickinson Dividend Stock Analysis [View article]
    regardless of whether BDX is in line with its peers or not, I think paying 13x for a dividend yield of 2.5% that grows in the long term at ~10% (conservative estimates given doubling every 6 yrs since 70s is 12% per year) is a very attractive proposition. I initiated a position in the mid 70s, and hoping it pulls back a bit from here so i can add more :) i only got about 2/3 of my position established
    Jan 5, 2013. 04:32 PM | 1 Like Like |Link to Comment
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