Becton, Dickinson and Company, a medical technology company, develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. This dividend champion has increased distributions for the past 38 consecutive years. The latest dividend increase was in November 2010, when the company raised distributions by 10.80% to 41 cents/share.
Over the past decade this dividend growth stock has delivered an annualized total return of 10.20% to its shareholders.
The company has managed to deliver an average increase in EPS of 13% per year since 2000. Analysts expect Becton Dickinson to earn $5.50 per share in 2011 and $6.12/share in 2012. The diversified product offering is a strong case behind the company’s business. Another positive is the strong sustainable global demand for the company’s diabetes-care, disease testing and safety products. The increased demand for cell analytics products in the US, should bolster growth in Becton Dickinson’s biosciences segment. The company is a diversified global player in the healthcare equipment field, with almost 55% of its sales derived outside of the US.
The company’s return on equity has been on the rise since 2000, has reach an impressive 25% in 2010. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.
The annual dividend payment has increased by 16.30% per year since 2000. A 16% growth in distributions translates into the dividend payment doubling every four and a half years. If we look at historical data, going as far back as 1964, we would see that Becton Dickinson has actually managed to double its dividend payment every six and a half years on average.
The dividend payout ratio has increased slightly over the past decade, although it never exceeded 50%. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.
Currently, Becton Dickinson is attractively valued at 15 times earnings, yields 2.00% and has a sustainable dividend payout. Although Becton Dickinson does have the characteristics of a great business with a strong competitive advantages, the low current yield as well as my current exposure to the sector makes this stock a hold. I would continue monitoring the stock and will consider initiating a position in the stock on dips.
Full Disclosure: None
Relevant Articles:
- Waste Management (WM) Dividend Stock Analysis
- The case for dividend investing in retirement
- Eight Dividend Growers In the News
- Intel Corporation (INTC) Dividend Stock Analysis
Popular Posts
-
I review the list of dividend increases each week, as part of my monitoring process. This exercise helps me monitor existing holdings and po...
-
I review the list of dividend increases every week, as part of my monitoring process. It's helpful as one of the things I use to review ...
-
The US Stock Market is one giant dividend growth machine. What is truly remarkable is that the record of dividend payments by US corporation...
-
Cash sitting on company balance sheet that's not utilized earns no/small return. There's a risk it would be pissed away/wasted on lo...
-
Many investors discuss Buffett on diversification, and conclude that he ran a "concentrated portfolio" This is missing the nuance ...
-
I review the list of dividend increasess every week, as part of my monitoring process. This exercise helps me review existing holdings and p...
-
Some people out there want to beat the market. As a result, many try different things, in order to achieve their goals and objectives. One o...
-
Success in investing is easy to compute. You either make money overall over a certain period of time, or you don't. If you do make money...
-
I review the list of dividend increases every single week, as part of my monitoring process. A long history of dividend increases is an indi...
-
I invest in Dividend Growth Stocks. These are companies that have managed to increase dividends for many consecutive years in a row. This i...