Becton Dickenson Has the Ability to Break Out

Stock (Symbol)

Becton Dickinson (BDX)

Stock Price


Data is as of
February 29, 2016
Expected to Report
May 5 – May 9
Company Description
bectondickinson_labBDX is a global medical technology company engaged in the development, manufacture and sale of a range of medical supplies, devices, laboratory equipment and diagnostic products used by healthcare institutions, life science researchers, clinical laboratories. The Company operates through two segments: BD Medical and BD Life Sciences. The Company’s Life Sciences segment consists of the BD Diagnostics and BD Biosciences segments. The Company’s BD Medical segment focuses on providing solutions to reduce the spread of infection, enhance diabetes treatment and advance drug delivery. The Company’s BD Diagnostics provides products for the safe collection and transport of diagnostics specimens, as well as instruments and reagent systems. Its BD Biosciences provide diagnostic and research tools to life science researchers, clinical researchers, laboratory professionals and clinicians. Source: Thomson Financial
Sharek’s Take
David SharekWith 20% plus profit growth right now, Becton, Dickenson (BDX) has the ability to break out and go to All Time highs. Last year BDX completed its acquisition of CareFusion, a maker of precision drug dispensing equipment. The company said this merger will add 22% to 2016 EPS, and for a 10% grower that’s huge. Now BDX offers a more complete menu of medical products to hospitals in addition to saving hundreds of millions on synergies. Becton can also use its deep International network to sell CareFusion products, which had just a limited presence abroad. Becton Dickenson has manufactured syringes, catheters, lab equipment, diagnostic tests, and other disposable items for hospitals since 1897. This is a conservative stock with excellent financial strength, stability, a top safety rating of 1 from Value Line and a 2% dividend which has increased every year since 1972. The estimated long-term growth rate is 14% in addition to a 2% yield. Profit growth was 28% last qtr, with expectations of 25% this qtr. But analysts predict just 9%, 13% and 11% profit growth the following qtrs. So maybe growth will settle back down. Overall, 2016 profits are expected to grow 17% in 2016 (after a 5% to 6% haircut from currency exchange) and the stock has a P/E of 18. My Fair Value is 20x earnings, or $168. 
One Year Chart
BDX_2016_Q1BDX has had a couple ow wild swings along with the stock market. Surprising since this is a conservative medical stock. This pattern is so wild I don’t know if the stock can break out at this time. Maybe BDX needs to make a downward sloping handle then break past it on high volume? This seems to be a good stock for conservative investors, but maybe growth investors should wait and see if they can get it on another dip?
Fair Value
BDX_2016_Q1_PHBecton Dickenson has grown profits every year for the last decade. The company’s products are used every day in hospitals, labs, clinics and doctors’ offices. I do want to point out this stock could have been had for 15x earnings around five years ago. During the last ten years BDX has grown from $64 to $150 and paid out $16 in dividends for a 160% total return.
Bottom Line
BDX_2016_Q1_10yrBecton Dickinson is an old-school stock that’s added some new blood in CareFusion. This deal will add profits, subtract costs, and give International growth opportunity. International should grow at double-digit rates this year from underdeveloped countries. BDX is growing 20%+ now but growth might settle down later in the year. This and ranks 5th of 36 stocks in the Conservative Portfolio Power Rankings
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