Reviewing Becton, Dickinson and Company (BDX) and Teleflex (NYSE:TFX)
Teleflex (NYSE: TFX) and Becton, Dickinson and Company (NYSE:BDX) are both mid-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, dividends, institutional ownership, profitabiliy, valuation, analyst recommendations and risk.
Institutional & Insider Ownership
92.9% of Teleflex shares are held by institutional investors. Comparatively, 75.4% of Becton, Dickinson and Company shares are held by institutional investors. 2.4% of Teleflex shares are held by company insiders. Comparatively, 1.4% of Becton, Dickinson and Company shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Teleflex pays an annual dividend of $1.36 per share and has a dividend yield of 0.7%. Becton, Dickinson and Company pays an annual dividend of $2.92 per share and has a dividend yield of 1.5%. Teleflex pays out 28.2% of its earnings in the form of a dividend. Becton, Dickinson and Company pays out 48.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Becton, Dickinson and Company has raised its dividend for 45 consecutive years. Becton, Dickinson and Company is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Teleflex has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Becton, Dickinson and Company has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.
This is a summary of recent ratings and target prices for Teleflex and Becton, Dickinson and Company, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Becton, Dickinson and Company||1||3||6||1||2.64|
Teleflex presently has a consensus price target of $214.80, indicating a potential upside of 3.48%. Becton, Dickinson and Company has a consensus price target of $188.60, indicating a potential downside of 3.96%. Given Teleflex’s stronger consensus rating and higher probable upside, research analysts plainly believe Teleflex is more favorable than Becton, Dickinson and Company.
This table compares Teleflex and Becton, Dickinson and Company’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Becton, Dickinson and Company||10.67%||25.37%||7.92%|
Earnings & Valuation
This table compares Teleflex and Becton, Dickinson and Company’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Teleflex||$1.93 billion||4.84||$505.98 million||$4.82||43.07|
|Becton, Dickinson and Company||$12.32 billion||3.40||$3.20 billion||$6.05||32.46|
Becton, Dickinson and Company has higher revenue and earnings than Teleflex. Becton, Dickinson and Company is trading at a lower price-to-earnings ratio than Teleflex, indicating that it is currently the more affordable of the two stocks.
Teleflex beats Becton, Dickinson and Company on 10 of the 18 factors compared between the two stocks.
Teleflex Incorporated is a provider of medical technology products. The Company designs, develops, manufactures and supplies single-use medical devices used by hospitals and healthcare providers for diagnostic and therapeutic procedures in critical care and surgical applications. The Company operates through six segments: Vascular North America; Anesthesia North America; Surgical North America; Europe, the Middle East and Africa (EMEA); Asia, and Original Equipment Manufacturer (OEM). The Company’s products include oxygen therapy products, aerosol therapy products, spirometry products, and ventilation management products, which are offered under Hudson RCI brand. As of December 31, 2016, it manufactured its products at approximately 30 manufacturing sites, with manufacturing operations located in the Czech Republic, Germany, Malaysia, Mexico and the United States. Its all others businesses include single-use respiratory, urology and cardiac care products, as well as capital equipment.
About Becton, Dickinson and Company
Becton, Dickinson and Company (BD) is a global medical technology company engaged in the development, manufacture and sale of a range of medical supplies, devices, laboratory equipment and diagnostic products. The Company operates through two segments: BD Medical and BD Life Sciences. The BD Medical segment produces an array of medical technologies and devices that are used to help improve healthcare delivery in a range of settings. BD Medical consists of various business units, including diabetes care, medication and procedural solutions, medication management solutions and pharmaceutical systems. The BD Life Sciences segment provides products for the safe collection and transport of diagnostics specimens, and instruments and reagent systems to detect a range of infectious diseases, healthcare-associated infections and cancers. The Company’s BD Life Sciences segment consists of various business units, including preanalytical systems, diagnostic systems and biosciences.
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