Becton Dickinson and CompanyBDX

Morningstar Rating

Stock Research and Analysis

by Alex Morozov, CFA

Becton, Dickinson's needle and surgical tool empire has provided investors with robust returns on capital for years. Now, largely because of the company's decades-long dedication to innovation and wise deployment of capital, its business is prospering Read more

Bulls Say

We have relatively optimistic growth assumptions for the firm's flow cytometry business, which sells instruments that assist in studying cells. We think Becton's academic, biotechnology, and government customers will continue to drive strong demand for this product, particularly as the new U.S. administration champions spending on research.

Economies of scale in Becton's medical segment stem from several global manufacturing plants that produce billions of needles, syringes, and other sharps. Becton's sizable infrastructure should preclude potential rivals from entering this business.

The Centers for Disease Control and Prevention recently issued guidelines to reduce the number of health-care-associated infections in U.S. hospitals. Becton stands to benefit from these requirements, as its rapid detection technology is one of only two FDA-approved options currently available.

Becton continues to raise its dividend, and its dividend yield is among the highest in the industry. The company has a record of returning wealth to its shareholders via share repurchases and increases in dividends. Read more

Bears Say

The company's labware business is unlikely to return to rapid growth in the near future, as hospitals may continue to delay their spending on nonessential products.

Becton is a defendant in several class-action cases related to injuries sustained as a result of using its products. If the firm's product liability insurance does not cover all of the costs associated with these suits, the company may incur substantial monetary damages.

Becton's diabetes sales may decline if large producers of insulin, such as Eli Lilly LLY and Sanofi-Aventis SNY, choose to prepackage insulin with internally manufactured delivery devices.

Becton's raw-material requirements include oil-based resin. The company has historically resisted pushing price increases onto customers and may suffer higher costs if oil prices rise. Read more

Strategy

The company is using its strong cash flows to finance expansion into the rapidly growing diagnostics and biosciences segments. Becton is ramping up its R&D in these markets to capitalize on worldwide Read more

Management

We assign Becton a B Stewardship Grade. The company has implemented several shareholder-friendly polices over the past few years. Since 2006, Becton got rid of its poison-pill provision, modified its executive severance arrangements to reduce mandatory Read more

Profile

Becton, Dickinson is the world's largest manufacturer and distributor of medical surgical products, such as needles, syringes, and sharps-disposal units. The company also Read more

First Name

Last Name

Email Address

Zip Code

Create Password

Verify Password

(6-15 characters; case sensitive)

What is your occupation or job title?

Select...

Your registration indicates agreement to the terms of use.

Dodge & Cox: Health Care Now More Attractive
Watch more