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Becton, Dickinson and Co. Posted By : admin
Posted On : Sunday, December 21, 2014
Company Name : Becton, Dickinson and Co. Investment Range : Long
Ticker : NYSE:BDX M.Cap.Range : Large-cap
Country : US Stock Price : 139.81
Description :        

Line of Business

Becton Dickinson is a global medical technology company engaged principally in the development, manufacture and sale of medical devices, instrument systems and reagents used by healthcare institutions, life science researchers, clinical laboratories, the pharmaceutical industry and the general public. The company operates in three segments: Medical (53% of revenue), Diagnostics (33%) and Biosciences (14%).

Medical focuses on advancing medication delivery, reducing the risk of medication errors and enhancing diabetes treatment. The segment has a history of market-leading innovations in injection- and infusion-based drug delivery and is among the world’s leading suppliers of safety-engineered medical devices. Products - Needles, syringes, IV catheters, Self-injection systems, Sharps disposal containers, Medication workflow solutions, etc.

Diagnostics focuses on improving quality, increasing productivity and ensuring flexibility to help laboratories guide medical decisions. The segment is a leading provider of products for the safe collection and transport of diagnostics specimens, as well as instruments and reagent systems to accurately detect a broad range of infectious diseases and cancers.

Biosciences focuses on improving efficiencies and outcomes for researchers, laboratory professionals and clinicians who are involved in research, drug discovery and development, biopharmaceutical production and disease management. The segment is focused on continually advancing the science and applications associated with cellular analysis.

Revenues by Geographic Segment

US - 42%

Europe - 31%

Asia pacific - 12%

Others (includes Latam, Canada, Japan) - 15%

Positives

  • Stable year on year financials performance in terms of revenues and margins
  • Long operating history
  • Long history of regular and increasing dividend payments
  • Share buybacks
  • Recurring business model

Negatives

  • Growth is very much saturated in US and other developed markets, growth is now mainly driven by developing markets like China, India, etc.
  • Health coverage is an important determining factor when patients and doctors choose among various treatment options and medical products. Medicare coverage is particularly significant in that it directly affects over forty million Americans, how much patients have to pay for BDX products (primarily BD Medical products), and how much BDX will receive in payments from Medicare. Currently, Medicare and other third party payers are emphasizing more cost-effective products, by limiting the reimbursement they will cover. Furthermore, even if a new BDX product is cleared by the FDA, BDX faces limited demand until Medicare and other payers approve it for reimbursement. Both of these factors can affect BDX's sales.

Customers

Hospitals, clinics, pharmacies, governmental and nonprofit public health agencies, pharmaceutical companies, healthcare workers and blood banks.

Competitors

Covidien and Gen-Probe

Summary

Diversified business across geographies, constant innovation will lead to incremental growth. But the current valuations does not suggest its cheap.

 
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