Becton, Dickinson: 5% Drop May Be A Good Entry Point

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Dividend Monk

Becton, Dickinson (NYSE:BDX), the large maker of surgical and diagnostic devices, reported Q1 results slightly under expectations, and company stock fell over 5% on the news on 2/8/11.

  • Revenue was $1.842 billion, which was short of the expected $1.89 billion.
  • EPS was $1.35, which was higher than the expected $1.29, but when a $0.07 tax benefit is removed, their results are short by a penny.

Much of this was due to Becton Dickinson benefiting last year from the flu epidemic and stimulus input. It's more of a matter of a strong 2010 than a weak 2011.

The company expects 4% revenue growth and 11% EPS growth for this year. Becton Dickinson is noted for having a huge streak of consistent increases in revenue without a miss. Every year since at least the early 90's, Becton Dickinson has reported revenue growth, and revenue has approximately doubled since 2001. It is, of course, unknown how long their streak of revenue increases will continue, but management's guidance expects that this year will not be the year it ends.

The company continued its strategy of organic growth combined with small acquisitions, as it announced a deal to acquire Accuri Cytometers, Inc.

Over the past five years, Becton Dickinson has increased its dividend by an annually compounded rate of over 13%, and the most recent quarterly increase for 2011 is a bit under 11%. The recent stock drop brought the dividend yield back up to around 2%.

The company continues to buy back shares as well. Becton Dickinson plans to repurchase $1.5 billion worth of shares in 2011 and $600 million in 2012. This is a total of $2.1 billion and represents a repurchase of over 11% of the market capitalization of the company in 2 years.

Overall, with a

This article was written by

Dividend Monk profile picture
My name is Mike McNeil and I’m the author of The Dividend Guy Blog along with the owner and portfolio manager over at Dividend Stocks Rock. I earned my bachelor degree in finance-marketing, own a CFP title along with an MBA in financial services. Besides being a passionate investor, I’m also happily married with three beautiful children. I started my online venture to educate people about investing and to be able to spend more time with my family. I used to struggle with the same issues millions of small investors deal with on a daily basis. Which stocks to buy? When to sell them? How to find the time to manage my portfolio? How to diversify? I wasn’t into dividend investing until I looked in depth at my portfolio returns and realized I was having difficulty keeping up with the market. The root of the problem was a very poorly built portfolio that lacked structure and the components required to build a sturdy base. I made good money from the stock market but I was taking unnecessary risk to achieve my investing goals. From that point on, I was determined to create a portfolio strategy that would allow me to benefit from dividend growth stocks as a solid foundation. Since then, I manage my portfolio with a stress free method that enables me to cash out dividend payments even when the market goes sour.

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