2.5 Reasons to Hold On to Becton, Dickinson's Stock

Becton, Dickinson (NYSE: BDX  ) is a selection for the real-money Inflation-Protected Income Growth portfolio. In this brief video, portfolio manager Chuck Saletta offers two-and-a-half reasons he's holding on to Becton, Dickinson's stock despite its 31% increase since he bought those shares in January 2013.

Summary:

  • No. 1: Solid balance sheet with a debt-to-equity ratio around 0.8, which suggests the company should have little trouble rolling over its debt in the near future.
  • No. 2: Healthy, well-covered dividend with recent growth and room to continue growing as the company does.
  • And the half-reason: It's market capitalization isn't too far ahead of the iPIG portfolio's fair-value estimate.

Top dividend stocks for the next decade
Becton, Dickinson made the cut for the iPIG portfolio in large part because of its dividend. The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily while allowing you to sleep like a baby.

Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, simply click here.


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  • Report this Comment On April 28, 2014, at 2:39 PM, strelna wrote:

    No. It is not 'beyond dispute'.

    One of the reasons BRKA/B has been such a good investment is precisely that it never paid a dividend. Lesser management would have paid one; lesser investors would have demanded one. Instead, compounded cash has generally been put to better use than a (taxed) dividend, to the advantage of investors.

    Elsewhere, it has often been better for investors for management to buy back stock, always providing they stay their hand until such time as the stock is truly cheap.

    The statement is only true in the most generalized way inapplicable to actual, good decision-making outcomes. For me, it is of little interest whether a company pays a dividend if it is good at reinvesting FCF in company growth.

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