Becton Dickinson (NYSE:BDX) sells basic healthcare products such as needles, surgical tools and syringes. It also sells products that are used in drug discovery and related lab functions. Sales aren't growing rapidly, but management has been able to control costs to boost earnings in the double digits annually. Going forward, investors should expect more than the same, and the stock looks very reasonably valued currently.

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Recent Developments
Becton held an analyst day last fall, where it revealed details on its expected business trends over the next few years. The company sees growth in emerging markets, through the introduction of new products, and from acquisitions. It also plans to continue to cut costs and improve its cost structure through initiatives such as making its supply chain more efficient. On the new product front, it has continually reinvested sales into research and development. R&D expense is projected to triple to 18% by fiscal 2014 from 2009 levels of 6%.

The company's recent history suggests it should be able to continue to deliver on its goals. Since 2004, profit margins have steadily improved. Operating margins have increased from around 15% to above 20% over the last twelve months. Sales growth has been somewhat modest at 6.1% over the past five years, but the cost controls have allowed it to leverage this into annual profit growth close to 14%.

SEE: A Look At Corporate Profit Margins

Outlook and Valuation
For all of 2012, analysts project modest sales growth of 1.8% and total sales just below $8 billion. The current projections are for 2013 top-line growth of 3.6% and total sales of nearly $8.3 billion. Profit projections for these two annual periods are $5.70 and $6.19, respectively, and represent forward earnings multiples of 12.8 times and 11.8 times, respectively. This is well below Becton's five-year average of 16.4 and below the forward market multiple of 12.9.

The Bottom Line
Becton's rivals include CR Bard (NYSE:BCR), Baxter International (NYSE:BAX), CareFusion (NYSE:CFN) and PerkinElmer (NYSE:PKI). Only Baxter trades at a lower forward multiple for the coming year but has had some safety issues with some of its products. All over a high degree of sales stability, but Becton stands out for having one of the clearest growth strategies in the field as well as a solid track record of delivering on its goals.

At the time of writing, Ryan C. Fuhrmann did not own shares in any of the companies mentioned in this article.

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