Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Becton, Dickinson and Co. (BDX), Novo Nordisk A/S (ADR) (NVO): Does The Healthcare Industry Mean Stability?

A look beyond
Covidien plc (NYSE:COV) is facing some challenging times since it reported sluggish results for the second quarter. The revenues were slightly up in comparison to last year, but profits were considerably down, due to lower margins and the adjustment of restructuring costs.
Mallinckrodt, the company’s pharmaceutical business, is being spun-off to unlock value, but it seems that the market has already valued it in the current share price. The company’s momentum is slowing, and to build it up it needs to focus on emerging markets. Currently I believe that its better to wait and watch when it comes to Covidien plc (NYSE:COV), as its losing its market share and the stock looks perfectly valued to surge further up.
Final words
The healthcare sector does not offer the promise of great share price hikes in a short span of time, but it does somewhat assure stability. More than half of Becton, Dickinson and Co. (NYSE:BDX)’s revenue comes from outside the U.S., which diversifies its operations and risks. Currently, only a quarter of the company’s operations are in the emerging markets, and these markets offer the potential for more than double-digit growth.
At a P/E ratio of 17.2 the company is fairly priced, and the company’s share repurchase program and stable dividends should attract income investors.

The article Does the Healthcare Industry mean Stability? originally appeared on Fool.com is written by tarun bachhawat.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.