BD is a medical technology company that serves healthcare
institutions, life science researchers, clinical laboratories,
industry and the general public. BD manufactures and sells a
broad range of medical supplies, devices, laboratory equipment
and diagnostic products. For the fiscal year ended September 30,
2003, BD reported total revenues of $4.528 billion.
(Source: Company Press Release)
[Source: Company Press Release]
Reasons to Invest:
This week's DOTW (Drip of the Week) is making waves right through the middle of its regression channel. In fact, this stock has gained close to 15 points in the last six months of trading, while offering a decent dividend of $0.15 per quarter. Becton, Dickinson and Co (NYSE:BDX) looks to have finally broken through its descending consolidation period, which formulated over June of 2003 to November of 2003.
News surround BDX has been upbeat. Most recently, BDX announced on May 4th, that they have developed a disposal system for "sharps [needles, lancets, and syringes]," which could ultimately help prevent any injuries to sanitation workers. Apparently, Americans alone use more than 3-billion "sharps" a year to treat at home sicknesses such as diabetes. The Environmental Health Agency (EPA) was concerned that these needle users were disposing of their needles in their household garbage. BDX's claims that their new system of "Disposal by Mail... is one of the best ways to safely dispose of used 'sharps' at home and unsure that they are properly destroyed."
There was new guidelines set up by the EPA which request "sharps" users to dispose of their needles in special "sharps" containers. Once they have done this, they then have to bring in the container, or mail the containers to designated collection centers for destruction. BDX developed a "Home Sharps Container" (holds approximately 70-100 insulin syringes or 300 pen needles or lancets) that is available at pharmacies. Once the container is filled up users can put the "Home Sharps Container" in the pre-paid "Disposal By Mail" package, which is constructed of heavy-corrugated cardboard and additional packaging materials, thus enabling the "sharps" to be disposed of safely and conveniently. Doing something as simple as creating pre-paid packages for "sharp's" users has enabled BDX to remain at the top of the Medical Tech industry.
Reuters reported that Becton, Dickinson and Co.'s second quarter earnings rose, due to strong sales in its medical safety devices, hence the news report above. Reuters went onto report that they expect BDX to gain 10-12 percent over the year earlier period for the year. Most analysts on average expect BDX to pull in $2.49 per share for the year
The last article worth mentioning came out on Halloween of last year. BDX developed the United States thinnest syringe (a 31-gauge), called the BD Ultra-Fine II Short Needle Insulin Syringe. They also developed the new (not so new now) "BD Ultra-Fine Needle Insulin Syringes, which are the thinnest insulin syringe needles available in the most widely used length in the US 12.7 MM (1/2 inch). I don't know about you, but if I had to use needles everyday I'd take the thinnest needles available as I get a bit squeamish just getting my regular flu shot. The article has about a page of advantages on the new release of these needles, but I am going to spare you these details.
From a technical standpoint BDX looks ready to break through its proverbial glass ceiling. The company has gained 14 points in six months, yet it still remains closer to oversold than overbought on the Stochastics Indicator (Daily Chart), which generally is a sign that further bullish activity could be on the horizon. The MACD bullish/bearish bars are consolidating around 0.50 but on Friday's action the stock remains on a bearish signal. Even more impressive, is the fact that BDX has yet to even test the lower bar of its regression channel. This is usually an indication that if the stock does test its lower regression channel bar that it will bounce off of this level and continue higher.
On the weekly chart the Stochastics indicator is in neutral territory (on a profit-taking sell signal), while the MACD has been on a buy signal for more than six months. On top of that the simple 10-DMA is more than 2 points over the 20-DMA, which is a good indication that we could continue to see further strength in this medical technology provider.
I took a peek at the Point and Figure Chart on BDX, and was impressed with its bullish price objective target of $81.00. BDX closed today (05/07/04) at approximately 50.68. If we saw BDX hit 81.00 that would be a gain of 30.23, which isn't too shabby. However, I find that PnF charts can be a little to optimistic, as I would put our price target at approximately 75.00.
On a final note, BDX is ranked in the top 8 percent of its industry over the past year. They also expect a dividend growth rate of 2.56 percent over the next year, 2.63 percent over the next three years, and 6.64 percent over the next five years. They currently have an annual dividend of $0.60, which tabulates out to a 1.17% dividend yield.
This ends another exciting episode of the DripAdvisor.com Drip of
the Week. Stay tuned next week, as we will spotlight another
stock worthy of the DripAdvisor.com limelight.
Until Next Week,
SIDENOTE: I have received several emails from readers asking about older recommendations that I have made, so instead of listing a new Drip of the Week article next week, I will be giving a recap on all the current DRIP's I have recommended since becoming editor of DRIPAdvisor.com.
Strong Buy 1
Strong Sell 0
Brokers Covering 16
Shares to Qualify = 1
Auto-reinvestment = Yes
Accept Foreign Accounts: Yes
Temper Enrollment: Yes
Min/Max Investment = $50-$UNLIMITED
Reinvestment Fees -
Dividend investment fees: $0.03 per share
Cash investment fees: $0.03 per share
Auto reinvestment fees: $0.03 per share
First Chicago Trust
One Becton Drive
Franklin Lakes, NJ 07417
Phone: (201) 847-6800
Fax: (201) 847-6475