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Becton, Dickinson: An Attractive Dividend Growth Stock In The Medical Supplies Industry

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Sure Dividend


  • Becton Dickinson is a leader in the medical supply industry. The company generates high levels of free cash flow and returns lots of cash to shareholders.
  • The acquisition of C.R. Bard provides Becton Dickinson with a strong growth catalyst.
  • Becton Dickinson is a high-quality Dividend Aristocrat.

By Nate Parsh

Becton Dickinson & Co (NYSE:BDX) is a global leader in the medical supply industry. With more than 4 decades of dividends growth, BD is a member of the Dividend Aristocrats. There are just 53 companies in the S&P 500 with at least 25 consecutive years of dividend increases. You can see all 53 Dividend Aristocrats here.

At the end of 2017, BD finalized its acquisition of C.R. Bard. The combined companies will be a force in the medical supply sector and should reward investors in the years to come in terms of both share price appreciation and dividend growth.

Shareholders of Becton, Dickinson have seen their shares easily outperform the S&P 500 over the past year.

Source: YCharts

While the S&P 500’s return of almost 12% is solid, the index can’t match Becton Dickinson’s gain of 17.69% over the last twelve months. Why has this medical supply company been able to outdo the market index? Part of the reason is that the company’s purchase of C.R. Bard is going to have a significant impact on revenues and earnings. In this article, we’ll examine Becton, Dickinson’s business, most recent earnings results, how the acquisition of C.R. Bard will impact the company going forward and the company’s dividend history to see if the stock should be bought at its current price.

Company Overview

Becton Dickinson has almost 50,000 employees and supplies products to more than 190 countries around the globe. The company has been in business since 1897 and generated more than $12 billion sales in 2017.

Source: 2017 Annual Report

Approximately 67% of sales came from the company’s Medical segment during the year. Products sold in this segment include hypodermic syringes, needles for diabetes care, drug delivery systems and surgical blades. The remainder of sales came from the Life Sciences division, which produces products

Investors looking for high-quality dividend growth stocks should consider the Dividend Aristocrats like Becton, Dickinson. The Dividend Aristocrats have significantly outperformed the S&P 500 Index in the last 10 years. Their outperformance is likely to continue moving forward, as the Dividend Aristocrats have strong brands and durable competitive advantages. This is why we created our service Undervalued Aristocrats, which provides actionable buy and sell recommendations on some of the most undervalued dividend growth stocks around. Click here to learn more.

This article was written by

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Sure Dividend helps individual investors find high quality dividend growth stocks with strong competitive advantages suitable for long-term holding. The authors who write for Sure Dividend on Seeking Alpha are as follows:Bob CiuraBen ReynoldsJosh Arnold

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

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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Comments (17)

One can buy this stock direct on Computershare. No start up fees, no cash purchase fees, no on going investment fee, no purchasing processing fee and no dividend reinvestment fee! I'm going to initiate a purchase soon and dollar cost average my way into some shares.
mr_cassandra profile picture
agree, great stock, I bought in 8/7/2015 , cost $147.55 , this was before I had settled on my minimum buy signal of a low full stochastic. Today I would have made the same entry at $130 a few weeks later in 205 when the full stochastic was below 15.
using the great analysis posted here at SA, I have compiled a starting list of stocks that I then watch for pullbacks. I feel that there are so many good candidates that I don't need to chase them, pullbacks are inevitable and I get nightly buy signals using a TA scanner from stockcharts.com on my watchlist.
A few years ago I was considering purchasing Becton Dickson or Baxter. I cannot remember now what made me decide to purchase Baxter, but that was a big mistake. I tired of Baxter and sold it and that was a mistake too. Double whammy!
RoseNose profile picture
Wonderful article and all is very true about BDX.
I got some a few years ago, close to 1.8% yield. I was going to add more, but it just took off and up and away- soaring away from my price point.....it continues to do so.
I admit to being glad I got some of this quality company.
I sit with it amazed with the price appreciation, but also admit it had better keep giving me nice dividend growth or I would have sold it long ago...
I consider selling calls on it, but just don't. I like this healthcare sector medical device player.
I would love to see a 2% yield to add some more-dreams often just do not happen.
The good news is it does have room to grow the dividend and is growing the price nicely.
Happy Investing :)) Rose.
MolluskOS profile picture
BDX rarely goes on "sale". I initiated my position circa 2010 and have added & reinvested to the point where it is now a top 5 holding along with V / BRK.B / BR / AAPL. All of which have grown into their current place in the hierarchy of holdings.

Holdings which I consider to be somewhat more conservative positions ( with the exception of BRK.B which I DO consider to be conservative) that formerly exceeded the above noted in $$ value have held their own but not increased to the same degree. Amongst these would be JNJ / PM / MMM / XOM / T / D / CL.

But this is fine with me. Over the long haul all have performed well. My takeaway from this might be most succinctly characterized as don't be too hesitant to pay up a bit for high quality businesses. And hang on for the ride...
Orphan Brigade profile picture
Good point.
Orphan Brigade profile picture
Boy, there stock is expensive...
I like the company and what they do but the dividend is somewhat skimpy. This company on the cap gains side keeps going !
BDX has been a fantastic holding and expect it to continue being so. Recently added on the dip. BDX is one of those businesses that when I look back I kick myself for not buying more.
Buyandhold 2012 profile picture
What are my thoughts on Becton Dickinson?

Sure Dividend, I agree with your thoughts on Becton Dickinson.
TopperBrad profile picture
I've been long BD for several years and is, currently, my only pure play healthcare company. One of my favorite things is that BD is a "boring" healthcare company.
11845871 profile picture
Thank you for the article. What is your view on the latest news of Amazon is looking to expand its medical supplies business and how it may impact BDX?
yardbird99 profile picture
That was my question too.
TopperBrad profile picture
My guess is that Amazon will be more disruptive to the medical DISTRIBUTORS (CAH, ABC and MCK) than the SUPPLIERS.
cn_habs profile picture
Yeah the middlemen will be cut while the manufacturers are more AMZN proof.
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