Becton Dickinson & Co. (BDX) is a global leader in the medical supply industry. BDX is currently trading at a P/E ratio of 13.3, which is below our assumed fair P/E of 19. An expanding valuation multiple could boost annual returns by 7.4% per year over the next five years, advises Ben Reynolds, editor of Sure Dividend Core.
The company generates almost $22 billion in annual revenue, with approximately 43% of revenue coming from outside of the US. BDX has a $45 billion market cap. On Feb. 9, BDX completed the separation of its Biosciences and Diagnostic Solutions business, which immediately combined with Waters Corp. (WAT).
On May 7, BD reported results for the second quarter fiscal 2026. Revenue grew 5.2% to $4.7 billion, which beat estimates by $30 million. Adjusted earnings per share (EPS) of $2.90 compared unfavorably to $3.36 in the prior year, but this was $0.13 better than expected.
BD provided an updated outlook for the full year as well. Revenue is still projected to grow at a low single-digit rate. Adjusted EPS are now expected to be in a range of $12.52 to $12.72.
BD has increased its dividend for 54 consecutive years, making it a Dividend King. This speaks to the longevity and strength of its competitive advantage. The company has also increased EPS 5.9% per year over the past decade – and has grown earnings in seven out of the last 10 years.
We now forecast that BDX can grow earnings at a rate of 5% per year through fiscal 2031. Along with the 5% projected EPS growth and a 2.5% dividend yield, we forecast total annual returns of 14.5% over the next five years.
Recommended Action: Buy BDX.
