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Is Becton, Dickinson And Company Poised To Continue Double-Digit Returns?

Passive Income Pursuit profile picture
Passive Income Pursuit


  • Every $1 invested in Becton, Dickinson & Company 30 years ago has compounded at 14.9% annually and turned into $65.08 today.
  • The shares are trading at $150.79, giving investors a current yield of 1.59%.
  • Medium-term returns from the current price level look to be in the high-single digits, with a high likelihood of double-digit annual returns.
  • Demographic trends will continue to spur growth and profitability of the best-run healthcare companies.

The healthcare industry is poised to continue to grow as the population continues to age. The unfortunate side effect of growing older is that your healthcare expenses tend to rise. A study from 2004 that analyzed the medical expenses of a cross-section of users found that almost half of lifetime healthcare expenses are incurred once you reach 65+.

With "Baby Boomers" retiring daily, this will lead to a rather large increase in the number of individuals aged 65 and over each year. There are currently around 45 million Americans over the age of 65, and that number is expected to increase to over 83 million by 2050. The most rapid growth in that segment of the population is expected to occur over the next 10-15 years, with slower, but consistent, gains each year until 2050. Here's how this population is expected to grow, based on a 2014 report from the Census Bureau.

Forecast Annual U.S. Population Aged 65+ Through 2050

One of my goals for this year was to increase my portfolio's exposure to the healthcare industry. Currently, my portfolio consists of just three healthcare companies that account for 8.7% of my investment capital and 6.4% of my forward 12-month dividends. Ideally, I'd like to get that to between 15-20% of both capital and dividends, so there's a lot of work to do on that front.

The demographic trends alone should continue to make the healthcare sector a very profitable one that grows faster than the economy as a whole. One healthcare company that has traditionally done very well is Becton, Dickinson & Company (NYSE:NYSE:BDX). Every $1 invested in BDX 30 years ago has compounded at 14.9% annually and turned into $65.08 today. Even better is that the company has rewarded investors along the way with 43 consecutive years of growing dividends.

Projected Earnings and Dividend Growth


This article was written by

Passive Income Pursuit profile picture
I started a dividend growth investment strategy a few years ago and am aggressively growing my portfolio to churn out enough dividends to reach financial independence.

Analyst’s Disclosure: I am/we are long BDX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am not a financial professional and all thoughts/ideas here are my own and for entertainment purposes only. Investing involves risks. Please consult a financial professional and do your own due diligence before investing. The author is not responsible for losses of any kind by readers. This analysis uses forward looking, although conservative, estimates that may not come to pass. All charts/images and data are sourced from my personal stock analysis spreadsheet, Morningstar, Yahoo!Finance, Becton, Dickinson & Company's Investor Relations page, and ValueEngine.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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