Buy or Sell Becton Dickinson Stock?

Becton Dickinson (BDX) stock has fallen 17% during the past day, and is currently trading at $171.68. We believe there is a near-equal mix of good and bad in BDX stock given its overall Moderate operating performance and financial condition. This is aligned with the stock’s Moderate valuation because of which we think it is Fairly Priced.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $49 Bil in market cap, Becton Dickinson provides medical supplies, devices, laboratory equipment, and diagnostic products for healthcare, research, and pharmaceutical industries, including IV catheters, vascular care, syringes, and specimen collection tools.

[1] Valuation Looks Moderate

This table highlights how BDX is valued vs broader market. For more details see: BDX Valuation Ratios

[2] Growth Is Moderate

• Becton Dickinson has seen its top line grow at an average rate of 5.4% over the last 3 years
• Its revenues have grown 6.2% from $21 Bil to $22 Bil in the last 12 months
• Also, its quarterly revenues grew 1.6% to $5.3 Bil in the most recent quarter from $5.2 Bil a year ago.

This table highlights how BDX is growing vs broader market. For more details see: BDX Revenue Comparison

[3] Profitability Appears Moderate

• BDX last 12 month operating income was $3.1 Bil representing operating margin of 14.2%
• With cash flow margin of 15.5%, it generated nearly $3.4 Bil in operating cash flow over this period
• For the same period, BDX generated nearly $1.8 Bil in net income, suggesting net margin of about 8.0%

This table highlights how BDX profitability vs broader market. For more details see: BDX Operating Income Comparison

[4] Financial Stability Looks Moderate

• BDX Debt was $20 Bil at the end of the most recent quarter, while its current Market Cap is $49 Bil. This implies Debt-to-Equity Ratio of 40.0%
• BDX Cash (including cash equivalents) makes up $751 Mil of $55 Bil in total Assets. This yields a Cash-to-Assets Ratio of 1.4%

[5] Downturn Resilience Is Moderate

BDX saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• BDX stock fell 20.7% from a high of $275.42 on 8 April 2022 to $218.29 on 9 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 24 July 2023
• Since then, the stock increased to a high of $283.59 on 27 July 2023 , and currently trades at $171.68

 
2020 Covid Pandemic

• BDX stock fell 29.9% from a high of $285.99 on 5 February 2020 to $200.58 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high

 
2008 Global Financial Crisis

• BDX stock fell 34.7% from a high of $92.34 on 16 January 2008 to $60.26 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 14 March 2013

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