Updated 3/6/25
Becton, Dickinson and Company, or BDX, has been a dominant player in the medical technology space for well over a century. The company, which got its start in 1897, has built a strong reputation in the healthcare sector, specializing in medical devices, laboratory equipment, and diagnostic products. Today, its products are found in hospitals, labs, and research facilities worldwide, making it a key supplier in the industry.
For investors focused on dividends, BDX has long been considered a solid and steady pick. While it may not offer the highest yield in the market, its commitment to dividend growth, strong cash flow, and resilience in the healthcare sector make it a worthy candidate for income-seeking portfolios. Let’s take a closer look at its dividend profile, financial health, and what investors should consider when evaluating the stock.
Key Dividend Metrics
📌 Dividend Yield: 1.78%
📌 Annual Dividend: $3.98 per share
📌 Payout Ratio: 65.49%
📌 5-Year Average Dividend Yield: 1.41%
📌 Dividend Growth Streak: Over 50 years
📌 Ex-Dividend Date: March 10, 2025
📌 Next Payment Date: March 31, 2025
Dividend Overview
BDX’s dividend yield currently sits at 1.78%, which is slightly higher than its five-year average of 1.41%. This indicates that investors are getting a better yield today compared to its historical trend, possibly due to stock price fluctuations. While this yield isn’t particularly high, BDX has a strong reputation as a reliable dividend payer, which is a major draw for long-term investors.
What stands out about BDX is its commitment to increasing dividends year after year. With a streak of over 50 years of dividend hikes, it has firmly earned its status as a Dividend Aristocrat. This kind of consistency can be especially valuable for investors looking for reliable income streams over time.
The payout ratio sits at 65.49%, meaning that BDX distributes a reasonable portion of its earnings to shareholders while still retaining enough to reinvest in growth. This balance is key in ensuring the dividend remains sustainable in the long run.
Dividend Growth and Safety
One of the best things about BDX’s dividend is its steady and predictable growth. The company has a long history of raising payouts, which gives income investors confidence in its ability to keep delivering. With its most recent annual dividend at $3.98 per share, the trend of consistent increases remains intact.
In terms of safety, the company generates strong cash flow, with operating cash flow at $3.65 billion and free cash flow at $3.36 billion. These figures indicate that the company has more than enough liquidity to cover its dividend obligations. Since BDX operates in the healthcare sector, where demand remains stable regardless of economic conditions, it has a level of insulation from broader market downturns.
Chart Analysis
Overall Trend
The chart for Becton Dickinson (BDX) shows a stock that has been in a downtrend over the past several months. The price has been making lower highs and lower lows, a classic sign of weakness in the market. While there have been brief periods of recovery, they haven’t been sustained, and the stock continues to struggle to hold gains.
Moving Averages
The 50-day moving average (orange line) and the 200-day moving average (blue line) tell a story of shifting momentum. The 50-day moving average crossed below the 200-day moving average a few months ago, which is often considered a bearish signal, sometimes referred to as a “death cross.” This suggests that short-term price action has been weaker than the longer-term trend.
At present, the stock is trading below both the 50-day and 200-day moving averages, reinforcing the idea that downward pressure is still in play. The 200-day moving average is sloping downward, further confirming that the longer-term trend remains negative.
Recent Price Action
Looking at the past few weeks, BDX has seen some volatility. The stock had a brief rally in February but was unable to maintain its upward momentum. It failed to hold above $240 and has since pulled back below $230.
The most recent trading session shows a close at $224.81, after hitting an intraday low of $222.53. The price tried to push higher during the day but ultimately failed to close near the highs, which could indicate continued selling pressure.
Volume Activity
Volume has been mixed, with some spikes in trading activity, particularly during larger price swings. The recent volume is not exceptionally high, suggesting that there isn’t a strong rush of buyers stepping in at these levels. If volume starts to pick up on up days, it could indicate renewed buying interest, but for now, it remains relatively average.
Relative Strength Index (RSI)
The RSI is sitting in the lower half of the range, which indicates that the stock is not overbought, but it also hasn’t reached deeply oversold levels. This suggests that while there has been selling pressure, there hasn’t been a clear capitulation move that would typically signal a reversal.
Key Levels to Watch
Support appears to be around $220, which has acted as a floor in the past. If BDX can hold above this level, it might try to stabilize. On the upside, resistance near $230 and $235 needs to be broken before any significant bullish momentum can develop. If the stock fails to move above those levels, it could see further downside pressure.
Analyst Ratings
📊 Becton, Dickinson and Company (BDX) has recently been the focus of several analyst evaluations, reflecting both optimism and caution. The consensus rating remains “Buy,” with an average price target of $278.29, suggesting a potential upside of around 24% from the current share price of $224.12.
📈 Upgrades
✅ Barclays increased its price target from $278.00 to $279.00 while maintaining an “overweight” rating. Analysts cited strong revenue growth and operational efficiencies as key factors behind their bullish stance.
✅ Piper Sandler also raised its price target from $275.00 to $280.00, reiterating its “overweight” rating. The firm’s confidence stems from BDX’s recent earnings report, which exceeded expectations. The company reported earnings per share (EPS) of $3.43, well above the estimated $3.00. Strong demand for its medical devices, coupled with cost-cutting measures, contributed to this earnings beat.
📉 Downgrades
⚠️ StockNews.com downgraded BDX from “buy” to “hold,” citing concerns about increasing competition in the medical instruments space. Analysts pointed to regulatory uncertainties and pricing pressures that could affect margins.
⚠️ Some analysts have also raised concerns about BDX’s debt-to-equity ratio of 0.69, suggesting that while the company remains financially stable, high debt levels could limit flexibility in a rising interest rate environment. This cautious stance led some firms to lower their near-term expectations for the stock.
🔍 While the overall sentiment leans positive, with an expected upside based on analyst targets, investors should weigh both the optimistic forecasts and the potential risks when evaluating BDX’s future performance.
Earnings Report Summary
Becton, Dickinson and Company (BDX) kicked off its fiscal year 2025 on a strong note, delivering solid earnings that highlighted growth across multiple areas of the business. Revenue for the quarter came in at $5.2 billion, reflecting a 9.8% increase from the same period last year. Even after adjusting for currency fluctuations, revenue still showed a healthy 9.6% gain, with organic growth contributing 3.9% to the total.
Earnings per share (EPS) also saw a significant boost. On a GAAP basis, diluted EPS was $1.04, up 8.3% year-over-year. However, the real standout was adjusted EPS, which climbed to $3.43, representing an impressive 28.0% increase from last year. This strong earnings growth was driven by expanding margins and disciplined cost management, helping BDX maintain profitability despite broader economic headwinds.
From a geographic perspective, growth was well-balanced. The U.S. market generated $3.08 billion in revenue, up 12.0%, while international sales reached $2.09 billion, a 6.7% increase. This balanced performance suggests that BDX continues to see strong demand for its products worldwide, even in a challenging market environment.
Looking at individual business segments, BD Medical had a particularly strong quarter, bringing in $2.615 billion in revenue, a 17.3% increase. This was largely fueled by higher demand for syringes, needles, and IV catheters. BD Life Sciences reported $1.297 billion in revenue, a modest but stable 0.7% gain, as its diagnostic systems and biosciences divisions held steady. Meanwhile, BD Interventional brought in $1.257 billion, marking a 5.8% increase, with growth coming from peripheral interventions and surgical solutions.
On top of solid operational performance, BDX continued to reward shareholders, completing a $750 million stock buyback during the quarter. This signals confidence in the company’s financial position and its ability to generate strong cash flow.
Overall, BDX delivered a well-rounded earnings report, showing strength in both revenue and profit growth across multiple segments and markets. While challenges remain in the broader healthcare sector, the company’s ability to navigate them effectively bodes well for the future.
Financial Health and Stability
BDX presents a mixed picture when it comes to its financial standing. While it has several strong points, there are some areas investors should keep an eye on.
On the positive side, revenue growth has been solid, increasing 9.8% year-over-year in the latest quarter. Its operating margin stands at 15.27%, which signals strong profitability in its core business. The fact that 93.62% of BDX’s shares are held by institutional investors also reflects confidence from large-scale, long-term investors.
However, the company does carry a significant amount of debt. With total debt at $18.76 billion and a debt-to-equity ratio of 74.42%, it is clear that BDX relies on leverage. While this isn’t necessarily a problem as long as the company maintains strong cash flow, it does introduce some risk if borrowing costs rise or economic conditions shift unexpectedly.
Its current ratio of 1.13 suggests that it can meet short-term obligations, but it doesn’t have a huge financial cushion. Another point to note is the company’s return on equity (ROE) of 6.84%, which is relatively low for a company of its size. This means that while BDX is profitable, it isn’t deploying its capital as efficiently as some of its competitors.
Valuation and Stock Performance
BDX is currently trading at $225.34, with a forward price-to-earnings (P/E) ratio of 15.97. This is lower than its trailing P/E of 37.73, signaling that analysts expect earnings to grow in the future.
Looking at other valuation metrics, its price-to-sales ratio of 3.16 is slightly lower than industry norms, while its price-to-book ratio of 2.55 suggests that it is trading at a fair valuation compared to its assets. The PEG ratio of 1.02 indicates that the stock is reasonably priced based on expected earnings growth.
From a price performance standpoint, BDX has struggled to gain momentum. The stock has been unable to break past $250, which has acted as a resistance level. With a 52-week trading range of $218.75 to $251.99, it is currently near the lower end of that range. Additionally, it is trading below its 50-day moving average of $232.63 and its 200-day moving average of $233.11, which suggests a lack of upward momentum in recent months.
For long-term investors, this could be an opportunity to buy at a discount. However, those looking for short-term price appreciation may want to wait for stronger technical signals before jumping in.
Risks and Considerations
Like any stock, BDX carries its own set of risks that investors should be aware of.
1️⃣ The company’s debt levels are high. While they are manageable now, any sustained increase in interest rates could make financing more expensive and limit dividend growth.
2️⃣ The medical device industry is highly competitive, with companies like Medtronic and Abbott Labs constantly innovating and competing for market share. BDX will need to keep investing in new technologies to maintain its leadership position.
3️⃣ As a healthcare company, BDX faces regulatory risks. Any changes in healthcare laws, pricing regulations, or unexpected legal challenges could impact its profitability.
4️⃣ The stock has underperformed the broader market in the past year, which raises some concerns about whether investors see enough growth potential in the near term. While the dividend remains strong, lack of share price appreciation could be a drawback for those looking for both income and capital gains.
Final Thoughts
For dividend investors, BDX remains a reliable choice. It isn’t the highest-yielding stock, but its track record of consistent dividend growth, strong cash flow, and defensive industry positioning make it a solid option for long-term income generation.
At its current valuation, the stock appears fairly priced, and its recent lack of price momentum may provide a chance for long-term investors to enter at a reasonable level. However, the company’s high debt load and relatively low return on equity should be monitored.
Ultimately, BDX fits the mold of a steady dividend payer—one that doesn’t offer explosive growth but delivers reliable and growing payouts over time.
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