Becton Dickinson’s operational discipline has allowed it to exceed earnings expectations despite a difficult operating environment. Its scale advantages and market leadership position it well to navigate current headwinds and even accelerate its growth as markets recover.
The recent stock price pullback presents an attractive entry point for long-term investors. With management taking decisive mitigation actions to address current challenges while maintaining focus on strategic growth initiatives, the firm is well-positioned for future success.
Becton Dickinson & Co. (Symbol BDX on New York; www.bd.com) is a global leader in manufacturing medical devices and supplies, serving hospitals, clinics, and pharmaceutical research firms across over 190 countries. The U.S. is its largest market, generating 60% of total revenue.
Becton operates three main divisions:
• Medical (51% of revenue): Produces devices like syringes, catheters, infusion pumps, and patient monitoring equipment.
• Life Sciences (25%): Offers products for specimen collection/disease detection and analysis.
• Interventional (24%): Manufactures surgical, vascular, and urology devices.
The COVID-19 pandemic had a major impact on Becton Dickinson’s finances. In 2021, revenue jumped 18.3% to $20.25 billion due to surging demand for testing kits and related supplies. However, in 2022, revenue decreased by 6.8% to $18.87 billion, largely reflecting the spinoff of embecta. Revenue rebounded in 2023, rising 2.7% to $19.37 billion, and continued to grow in 2024, reaching $20.18 billion, a 4.2% increase.
Earnings per share before unusual items were $10.20 ($2.88 billion) in 2020, rose to $13.08 ($3.91 billion) in 2021, and then adjusted to reflect recent business changes, coming in at $11.35 ($3.20 billion) in 2022, $12.21 ($3.58 billion) in 2023, and $13.14 ($3.80 billion) in 2024.
In September 2024, Becton acquired the Critical Care product group of Edwards Lifesciences Corp. (New York symbol EW) for $3.9 billion. This business makes equipment to monitor the vital signs of patients in hospital, nursing homes and other healthcare facilities. It’s now the Advanced Patient Monitoring unit of the Medical division.
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Due partly to that purchase, Becton’s revenue in its fiscal 2025 second quarter, ended March 31, 2025, rose 4.5%, to $5.27 billion from $5.05 billion a year earlier. Excluding one-time items,
per-share earnings improved 5.7%, to $3.35 from $3.17.
Becton is in a strong position to keep making acquisitions. It ended the quarter with cash of $667 million, while its long-term debt of $17.67 billion is a manageable 35.7% of its market cap.
Becton Dickinson: Plan to launch 100 new products to drive growth
Becton Dickinson’s “BD 2025" growth plan aims to launch over 100 new products by the end of fiscal 2025, with a target of annual organic revenue growth of 5.9%, an upgraded goal from the previous 5.5%. The company expects operational improvements to help lift profit margins above 25%.
Looking ahead, Becton now plans to spin off its Biosciences and Diagnostic Solutions operations as a separate, publicly traded firm. That business makes products that help medical providers collect, transport and analyze medical samples. It also sells instruments and substances to medial research labs.
This new firm has annual revenue of $3.4 billion, with 80% coming from recurring supply contracts.
Becton has not yet announced the details of the separation, but the plan should let investors defer capital gains taxes until they sell their new shares. It aims to complete the transaction in 2026.
Meanwhile, Becton has a strong record of rewarding shareholders, having increased its dividend for 53 consecutive years. The current annual dividend rate is $4.16, yielding 2.4%.
Recommendation in Wall Street Stock Forecaster: Becton Dickinson & Co. is a buy.
