This spinoff has a bright future

Article Excerpt

EMBECTA CORP. $27 is a buy. The company (Nasdaq symbol EMBC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 57.8 million; Market cap: $1.6 billion; Price-to-sales ratio: 1.5; Dividend yield: 2.2%; TSINetwork Rating: Average; www.embecta.com) took its current form in April 2022 when Becton Dickinson & Co. (New York symbol BDX) spun off its Diabetes Care business as a separate, publicly traded firm. Investors received one share of embecta for every five common shares of Becton they held. The stock is down about 35% since the split. However, embecta’s long-term outlook remains bright—the International Diabetes Federation expects the number of people in the world with diabetes could rise 46%, from 537 million in 2021 to 783 million by 2045. The company will likely earn $2.30 a share for all of fiscal 2023, and the stock trades at a low 11.7 times that forecast. It also pays a quarterly dividend of $0.15 a share; the annual rate of $0.60 yields 2.2%. embecta is a buy. buy. …