Saturday, November 22, 2008

Dividend Stock Review: Benton, Dickinson & Co (BDX)

Becton, Dickinson and Company (BDX) is a global medical technology company that is focused on improving drug delivery, enhancing the diagnosis of infectious diseases and cancers, and advancing drug discovery. BDX develops, manufactures and sells medical supplies, devices, laboratory instruments, antibodies, reagents and diagnostic products through its three segments: BD Medical, BD Diagnostics and BD Biosciences. It serves health care institutions, life science researchers, clinical laboratories, the pharmaceutical industry and the general public.

BDX has a corporate strategy to drive revenue growth through investment in innovation and to drive operational effectiveness to accelerate performance and fund innovation. BDX has increased revenue over 10% per year for the last six years and has profit margins over 51% using this strategy. BDX has four strategic focus areas: Reduce spread of infection, Advance global health, Enhance therapy and Improve disease management.

Reduce Spread of Infection
BDX has a number of initiatives in the area of reducing the spread of infection. They have products that focus on areas such as health care worker safety, patient safety, detection of sexually transmitted disease, rapid diagnosis of infectious diseases, rapid detection of health care associated infections. They also have systems and software that can link these areas to provide fast delivery of results.

Advance Global Health
Global health is also an focus of BDX and they are the leader in HIV/AIDS & TB detection and monitoring. They also train health care providers in using their equipment to provide strong laboratory skills. The are also a leader reuse prevention through low cost auto disable devices for immunization.

Enhance Therapy
Products to enhance therapy such as stem cell research and the manufacture of cell culture media supplements to enhance drug production. They are also the leader in prefillable devices which helps reduce potential for medication error. BDX is also creating micro-delvery systems that have ultra tiny needs that size of a human hair for vaccines in agreement with Sanofi Pasteur.

Improve Disease Management
BDX working to improve disease management in the areas of diabetes and cancer diagnostics. They are a global leader in insulin injection and the pen needle market with innovation coming with their Untra-Fine mini pen needle. They also are creating new and innovative solutions for monitoring and detecting ovarian cancer.

BDX reported quarterly revenues on November 5 of $1.836 billion for the fourth fiscal quarter ended September 30, 2008, representing an increase of 11 percent over the prior year period. This quarter’s growth rate reflects the favorable impact on all segments from foreign currency translation, which overall is estimated to account for 5 percentage points of the increase in quarterly revenues.

For the full fiscal year ended September 30, 2008, BD reported record revenues of $7.156 billion, representing an increase of 13 percent over the prior year, which reflects an overall estimated 6 percent favorable impact from foreign currency translation that affected all segments.

"We are pleased to report another strong year for BD, one in which we exceeded our strategic and financial goals despite a challenging business environment," said Edward J. Ludwig, Chairman, President and Chief Executive Officer. "All segments contributed to our success and growth. Implementation of disciplined spending controls enabled us to expand our operating margins as we continued to make significant capital and R&D investments to support our innovation strategy."

BDX has been increasing R&D spending through improving profit margins that will lead to growth through new innovations. The company will also benefit from low oil prices that will keep down the cost of resin which is used in most of their products. I believe BDX will be a great long term dividend stock that will benefit from the aging population and the increasing levels of obesity in the world.

Disclosure: The Div Guy own shares of BDX at the time of this post.

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2 comments:

  1. This is a company I haven't owned for over a year (kept BAX instead) but I work daily with their products. Excellent R&D, product development and very patient/professional centred. If the stock was cheaper I would definitely look to re-establish my position but this is likely one that I will look at intently around the $55 mark.

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  2. Nurse911,

    I have not bought BDX in the past because of the price but I think low 60's should be a good place to start buying shares.

    ReplyDelete

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