Dividend Aristocrat Overview: Becton, Dickinson and Company

About Becton, Dickinson and Company

Manufacturing devices like these pen needles has helped Becton, Dickinson and Company provide dividend growth to investors since 1967. Photo courtesy NapInterrupted via flickr.com.

Manufacturing devices like these pen needles has helped Becton, Dickinson and Company provide dividend growth to investors since 1972.
Photo courtesy NapInterrupted via flickr.com.

Becton, Dickinson and Company is a worldwide manufacturer of medical supplies and devices, along with laboratory equipment and diagnostic products.

Becton, Dickinson and Company was formed in 1897 when Maxwell Becton and Fairleigh Dickinson decided to go into business importing medical devices.  After acquiring the Philadelphia Surgical Company in 1904, the company was able to manufacture its own surgical equipment.  Additional acquisitions and mergers continued over the succeeding decades that allowed the company to expand.

In 1962, Becton-Dickinson went public and the following year it was listed on the New York Stock Exchange under the symbol BDX.  The company expanded into Europe in the 1970s, and has continued to expand its business through acquisition and growth to this day.  Becton-Dickinson has three business lines: BD Medical, which includes anesthesia, surgical and injection products, BD Diagnostics, which includes testing and diagnostic systems for biological specimens, and BD Biosciences, which includes cell imaging and analysis systems.  In fiscal year 2013, Becton-Dickinson had over $8 billion in revenues, EBITDA (earnings before interest, taxes, depreciation and amortization) of nearly $2.2 billion and net income excluding extraordinary items of $929 million.

The company is a member of the S&P 500 index and a Fortune 500 company and trades under the ticker symbol BDX.

Becton, Dickinson’s Dividend and Stock Split History

Becton, Dickinson and Company has been a Dividend Aristocrat since 1996 and in 2013 increased its dividend for the 42nd consecutive year.  The company has paid regular quarterly dividends since going public in 1962.  The company has usually increased the dividend in the 4th quarter of the calendar year and in 2013 increased the quarterly dividend by 10.1%, from 49.5 cents to 54.5 cents per share.  The next dividend increase is expected to be announced in late November 2014 and to be paid in late December 2014.

Becton-Dickinson has an excellent long-term dividend growth history.  Over the last 10 years, BD has quadrupled their dividend payout increasing from 45 cents in 2003 to $2.03 in 2013, giving the company a 10-year compounded annual dividend growth rate (CADGR) of 16.26%.  More recently, BD has reduced the dividend growth rate with 1-year and 5-year CADGRs of 10.03% and 11.37%, respectively.  Even longer term, BD has a 20-year CADGR of 13.20% and a 25-year CADGR of 12.29%.  (Note that all CADGRs are calculated to 2013.)

As noted above, Becton-Dickinson became a public company in 1962 and immediately began paying quarterly dividends.  The company has also split its stock seven times since 1962: a 4 for 3 split in December 1963, a 3 for 2 split in 1969, and 2 for 1 splits in November 1966, February 1986, February 1993, August 1996, and August 1998.  100 shares purchased at the beginning of 1997, after BD increased dividends for 25 consecutive years, would have cost $4,337.60 plus commissions and paid $53.50 in dividends that year.  By the end of 2013, the shares would have split into 200 shares worth $22,098 that paid a total of $406 in dividends that year.  This equates to a compounded return of 10.05% annualized between 1996 and 2013.  Reinvested dividends would have increased the return.

Becton, Dickinson’s Direct Purchase and Dividend Reinvestment Plans

Becton, Dickinson has both direct purchase and dividend reinvestment plans.  The minimum investment for new accounts is $250 for a one-time purchase or $50 per month for at least 5 months for automatic investments.  Additional investments must be $50 regardless of method.  The dividend reinvestment plan permits full or partial reinvestment of dividends

The company pays nearly all fees associated with purchases whether through a direct cash investment or through the reinvestment of dividends – the only purchase fee is 3 cents per share.  When selling shares in the plan, investors will be charged $15 per sale plus 15 cents per share.

Helpful Links

Becton, Dickinson and Company’s Investor Relations Website

Current quote and financial summary for Becton, Dickinson and Company (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Becton, Dickinson and Company