Stumped by stents? Flustered by defibrillators? Don't know an acetabular hip system from acetaminophen? Well, you don't have to go fancy (or popular) to make money in health care and medical technology. Becton Dickinson (NYSE:BDX) may not get quite as much attention as flashier medical-technology names, but this stock has been nearly a 46-bagger over the past 20 years.
Results from the company's first quarter would seem to be more of the consistent, non-flashy variety. Revenue rose 10% to more $1.4 billion on broad-based growth from all of the company's separately reportable units. Margins also ticked up a bit, and operating income grew 17% over last year (excluding an insurance settlement).
Looking at the units, BD Medical saw sales rise 11% overall. Diabetes-care sales were up strongly with nearly 16% growth, and pharmaceutical systems sales were even stronger (up 30%). Although the diagnostics business was the laggard with more than 7% growth, the company did see strong sales of flu test products. Last but not least, BD Bioscience grew more than 10%, with strong growth in the immunocytometry segment.
While this company has been a proven winner over time (see again that "46-bagger in 20 years" bit), it's still important to buy at the right time and price. After all, paying too much, even for great companies like Pfizer (NYSE:PFE), Medtronic (NYSE:MDT), or AbbottLabs (NYSE:ABT), can leave you frustrated and impatient as you wait for the market to work off that excess valuation.
With that in mind, I'm inclined to take a pass on Becton Dickinson for now. I'm sure there will come a time over the next couple of years when it will stumble, or when analysts will begin to question its future competitiveness. That's when I'll get more interested. In the meantime, I'd rather look to fill my shopping cart with relatively unloved stocks, like Abbott and Kinetic Concepts (NYSE:KCI), or maybe even with an orthopedics company or two.
Some further Foolishness a day keeps the doctor away:
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
