Becton Dickinson and Company (BDX): Gold Standard Defensive Stock

We just covered the 14 Best Defensive Stocks to Invest In Now and Becton, Dickinson and Company (NYSE:BDX) ranks 8th on this list.

Becton, Dickinson and Company (NYSE:BDX) is called a gold standard defensive stock. While some medical tech firms are volatile due to elective surgery trends, the firm is the primary global supplier of the bread and butter medical consumables that hospitals cannot function without. The defensive strength of the company lies in the high-volume, non-discretionary nature of its products. It is the world leader in syringes, needles, catheters, and blood collection tubes. These are not luxury items, they are essential for almost every medical procedure, regardless of the economy. Approximately 90% of BD’s revenue is derived from recurring sales of these consumables. This creates a utility-like cash flow that remains steady even during deep economic contractions.

For defensive investors, Becton, Dickinson and Company (NYSE:BDX) offers extreme income reliability. The company has increased its dividend for 54 straight years, firmly placing it in the elite category of Dividend Kings. The stock offers a dividend yield of approximately 1.6%–1.8%. While not the highest yield in the sector, the payout is backed by a very conservative 30%–35% payout ratio, meaning the dividend is incredibly safe even if the company faced a temporary earnings dip. By automating its manufacturing and divesting lower-margin segments, like the Embecta diabetes spin-off, the firm has pushed its operating margins toward 25%.

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