Becton Dickinson & Co. is poised for a transformative shift through its transaction with Waters Corp. (discussed below), which presents a significant value creation opportunity and will reshape the company into a more focused, higher-growth medical technology enterprise. The new version of the firm will benefit from enhanced profit margins, reduced complexity, and accelerated investments in high-growth areas like drug delivery, connected care, and automation systems.
And with over 70% recurring revenue and exposure to essential healthcare markets, this pick offers defensive growth qualities that should perform well across economic cycles.
Meanwhile, the stock trades at 12.6 times the company’s forward earnings forecast.
BECTON DICKINSON & CO. (New York symbol BDX; 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.
The firm operates through three segments: Medical (50% of revenue) makes an array of devices for hospitals, doctors’ offices and other clients in health care; Life Sciences (25%) sells products for collecting and shipping biological specimens as well as equipment for detecting diseases; and Interventional (25%) makes stents, catheters, needles, incontinence devices and surgical tools.
In February 2025, Becton announced a plan 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.
However, the company has decided instead to merge this business with lab equipment maker Waters Corp. (New York symbol WAT).
Under the terms of the deal, Becton shareholders will own 39.2% of the combined company, with Waters’ shareholders holding the other 60.8%. Becton investors will not be liable for capital gains taxes until they sell their new shares.
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Becton will also receive a cash payment of about $4 billion just before the combination, currently planned for early 2026. The company plans to allocate half the proceeds to debt repayment and half to share buybacks.
This new firm will have 2025 sales of $6.5 billion and gross profits of $2.0 billion. It expects eliminating overlapping operations will add $345 million to its gross profits by the end of the fifth year.
Becton’s acquisition of Edwards Lifesciences accelerates revenue and earnings growth
Becton acquired the Critical Care product group of Edwards Lifesciences Corp. (New York symbol EW) in September 2024 for $3.9 billion. This business makes equipment to monitor the vital signs of patients.
The new operations helped lift Becton’s revenue in its fiscal 2025 third quarter, ended June 30, 2025, by 10.4%, to $5.51 billion from $4.99 billion a year earlier. Earnings gained 5.1%, to $3.68 a share from $3.50.
The Waters Corp. merger should be a big plus for Becton. The transaction helps it unlock some of its hidden value. It will also let the company better focus on its main businesses, which will help it respond to the impact of tariffs on products it makes outside of the U.S.
Meanwhile, Becton expects tariffs will have cut its earnings in the fiscal year ending September 30, 2025, by $0.25 a share. Going forward, it now expects to earn $14.89 a share in fiscal 2026, and the stock trades at a low 12.6 times that estimate. The $4.16 dividend yields 2.3%.
Recommendation in Wall Street Stock Forecaster: Becton Dickinson & Co. is a buy.
