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
- 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
One of my favorite quotes from Warren Buffett deals with an issue that many dividend investors face from time to time. The quote is” If you...
Dividend growth stocks are the gift that keeps on giving . I like the fact that most of the work in selecting good dividend growth stocks is...
I have been a dividend growth investor for over 7-8 years now. The reason why I have somewhere between 85% - 90% of my networth in dividend ...
I have received quite a few emails recently, asking me how I manage my dividend portfolio . In general, I focus on several things that I b...
I love it when the stock market goes on sale, like it has been so far in the past two - three weeks. For aspiring dividend growth investors,...
The goal of every dividend investor is to generate dividend income that is larger than their annual expenses. This coveted goal is called th...
How do you define success? To me, success is the freedom to do my own thing, and the ability to reach my goals. Given the fact that I am a f...
One of the biggest sins in investing, is investing money without a clear plan or strategy to accomplish specific goals . This investing sin...
I am a fan of diversification as a tool to reduce risk. I diversify by buying at least 30 – 40 securities, representative of as many sectors...
McDonald's Corporation (NYSE:MCD) franchises and operates McDonald's restaurants in the United States, Europe, the Asia/Pacific, the...