For many years, Becton Dickinson (NYSE:BDX) has been summarily dismissed by a lot of portfolio managers as "too boring". Well, their loss. Although the stock of this diversified health care and biosciences company could not match the pace of health care all-star Medtronic (NYSE:MDT), it stacks up quite well against the likes of Abbott Labs (NYSE:ABT), Baxter (NYSE:BAX) and many other more "exciting" names. Proof, perhaps, that the steak is more satisfying than the sizzle.

IN PICTURES: 20 Tools For Building Up Your Portfolio

A Quiet Quarter
The first quarter of 2010 was pretty much medium, with little to get excited about in either direction. Revenue growth of about 7% was in line with expectations, while the earnings per share (ex-items) were four cents ahead of the average estimate.

Results across the company's three major business lines were mixed. Strong results in diabetes care and pharmaceutical systems helped offset weakness in medical surgical systems (largely injection, infusion and infection-prevention products) in the BD Medical segment. Diagnostics saw results in cancer and STD testing offset a decline in flu testing, while cell analysis products helped boost results in the biosciences business. (For related reading, check out A Checklist For Successful Medical Technology Investment.)

New Tech Can Maintain the Momentum
It seems practically a given that Becton Dickinson will increasingly tie the future of its growth to advanced diagnostics and bio-research products. In diagnostics, the company faces stiff competition from companies like Roche (Nasdaq:RHHBY), Qiagen (Nasdaq:QGEN) and Gen-Probe (Nasdaq:GPRO) in its STD testing franchise, and Cepheid (Nasdaq:CPHD) in hospital-acquired infections.

To compete, the company plans to roll out a new molecular diagnostics platform, the BD MAX, in 2011. This automated real-time PCR platform could go a long way in tapping the fast-growing molecular diagnostics market. Of course, Cephied and Gen-Probe have their own automated systems (with Gen-Probe's new Panther expected in the U.S. in 2011), so the battle should really get interesting at that point.

Likewise, expect the company to continue to look to innovate or acquire to build up the biosciences business. With BDX's existing strength in flow cytometry, it wouldn't be surprising to see them interested in a fast-growing company like Luminex (Nasdaq:LMNX). But even if the company foregoes acquisitions (or at least acquisitions of that size), expect management to preferentially invest in a market segment whose growth should outpace that of BDX's other markets by a reasonable margin.

A Stock That Gives You Second Chances
Becton Dickinson isn't all that expensive at today's prices. That said, this is a stock that always seems to give investors a pullback of at least 10% every year. Perhaps we already saw that move when the stock went from about $80.50 around the end of last year to below to below $75 in early February, or maybe there is a second slide to come. In either case, you don't have to rush to buy this stock. It is a fine company as is, but if you can get it for 10% less, why not wait it out?

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  2. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares Morningstar Small-Cap Value

    Find out about the Shares Morningstar Small-Cap Value ETF, and learn detailed information about this exchange-traded fund that focuses on small-cap equities.
  4. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  6. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  7. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  8. Professionals

    What to do During a Market Correction

    The market has what? Here's what you should consider rather than panicking.
  9. Mutual Funds & ETFs

    ETF Analysis: WisdomTree SmallCap Earnings

    Discover the WisdomTree Small Cap Earnings ETF, a fund with a special focus on small-cap and micro-cap stocks with positive earnings.
  10. Mutual Funds & ETFs

    ETF Analysis: iShares US Regional Banks

    Obtain information and analysis of the iShares US Regional Banks ETF for investors seeking particular exposure to regional bank stocks.
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Profit Margin

    A category of ratios measuring profitability calculated as net ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis ...
  4. Debt Ratio

    A financial ratio that measures the extent of a company’s or ...
  5. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing ...
  6. Net Present Value - NPV

    The difference between the present values of cash inflows and ...
  1. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>
  6. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!