Investor Update: BD’s Recent Dividend Announcement
BD’s latest dividend increase
On January 22, 2018, Becton Dickinson (BDX) announced a quarterly dividend of $0.75 per common share for 2Q18, which will be payable on March 30, 2018, to shareholders of record as of March 9, 2018. The company paid a $0.75 per share dividend to its shareholders on December 29, 2017, for fiscal 1Q18. BD’s fiscal 2018 indicated annual dividend stands at $3 per share. Fiscal 2018 quarterly dividends represent an increase of ~2.7% over the previous fiscal 2017 quarterly dividend of $0.73 per share. BD’s current dividend yield stands at 1.4% as of February 12, 2018.
On January 22, 2018, BD’s board of directors declared a quarterly dividend of $15.3 per share on the 6.1% mandatory convertible preferred stock Series A. This dividend is payable on May 1, 2018, to BD shareholders of record on April 13, 2018. The announced dividend represents $0.77 per depositary share of the quarterly dividend payment on BDXA stock. As of February 12, 2018, peers Medtronic (MDT), Zimmer Biomet Holdings (ZBH), and Abbott Laboratories (ABT) have dividend yields of 2.3%, 0.82%, and 2.0%, respectively. Becton Dickinson is part of the Vanguard Dividend Appreciation ETF (VIG). VIG holds ~1.4% of its total holdings in BDX stock.
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BD’s capital allocation and dividend payment strategy
BD has consistently increased shareholder dividends for the past 46 years. The company is a dividend aristocrat, which are companies that have increased dividends to shareholders for the last 25 years. In fiscal 1Q18, BD made dividend payments of ~$210 million to shareholders.
Rising dividends are one of the key long-term growth targets for BD for 2017 through 2019, as shown in the diagram above. As part of its capital allocation strategy, BD has consistently made share repurchases and provided value to its shareholders. However, the company is committed to prioritizing debt repayments over recent years due to the debt undertaken for the acquisitions of CareFusion in 2015 and the recently completed Bard acquisition.