Becton, Dickinson and Company (BDX) Bundle
Understanding Becton, Dickinson and Company (BDX) Revenue Streams
Understanding Becton, Dickinson and Company’s Revenue Streams
For the fiscal year 2024, the total revenues reached $20.178 billion, marking a 4.2% increase compared to $19.372 billion in 2023.
Breakdown of Primary Revenue Sources
The revenue streams for the company can be categorized into three main segments:
- BD Medical: Total revenue of $10.074 billion, up 6.0% from $9.502 billion in 2023.
- BD Life Sciences: Total revenue of $5.191 billion, reflecting a 1.1% increase from $5.133 billion in 2023.
- BD Interventional: Total revenue of $4.980 billion, which is a 5.1% growth from $4.736 billion in 2023.
| Segment | Revenue 2024 ($ million) | Revenue 2023 ($ million) | Year-over-Year Change (%) |
|---|---|---|---|
| BD Medical | 10,074 | 9,502 | 6.0 |
| BD Life Sciences | 5,191 | 5,133 | 1.1 |
| BD Interventional | 4,980 | 4,736 | 5.1 |
| Total Revenue | 20,178 | 19,372 | 4.2 |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rates indicate the following trends:
- Q4 2024 revenue totaled $5.437 billion, a 6.9% increase from $5.087 billion in Q4 2023.
- For the entire fiscal year 2024, the organic revenue growth was reported at 5.7%.
Contribution of Different Business Segments to Overall Revenue
The contributions of different business segments to overall revenue are as follows:
- BD Medical: Contributed 50% of total revenue.
- BD Life Sciences: Accounted for 25.7% of total revenue.
- BD Interventional: Made up 24.3% of total revenue.
Analysis of Significant Changes in Revenue Streams
Significant changes in revenue streams include:
- Medication Management Solutions: Experienced a growth of 10.7%, reaching $3.297 billion.
- Advanced Patient Monitoring: Newly established segment post-acquisition of Critical Care, generating $74 million in Q4 2024.
- Urology and Critical Care: Reported a substantial growth of 13.1%.
A Deep Dive into Becton, Dickinson and Company (BDX) Profitability
A Deep Dive into Becton, Dickinson and Company’s Profitability
Gross Profit Margin: For the fiscal year 2024, the company reported revenues of $20.178 billion with a cost of products sold amounting to $11.025 billion. This results in a gross profit of $9.153 billion, leading to a gross profit margin of approximately 45.4%.
Operating Profit Margin: The total operating costs and expenses for FY2024 were $17.752 billion, resulting in an operating income of $2.425 billion. Therefore, the operating profit margin stands at about 12.0%.
Net Profit Margin: The net income applicable to common shareholders for FY2024 was $1.726 billion, leading to a net profit margin of 8.6%.
Trends in Profitability Over Time
Comparing FY2024 to FY2023, the gross profit margin improved from 47.0% to 45.4%, while the operating profit margin increased from 10.9% to 12.0%. The net profit margin also saw growth, rising from 7.7% in FY2023 to 8.6% in FY2024.
| Metric | FY2024 | FY2023 | % Change |
|---|---|---|---|
| Gross Profit Margin | 45.4% | 47.0% | -1.6% |
| Operating Profit Margin | 12.0% | 10.9% | +1.1% |
| Net Profit Margin | 8.6% | 7.7% | +0.9% |
Comparison of Profitability Ratios with Industry Averages
The average gross profit margin for the medical technology industry is around 65%, indicating that the company is below this benchmark. The operating profit margin for the industry averages about 15%, which suggests that the company is performing slightly below average. The net profit margin for the industry is approximately 10%, thus the company is performing on par with this average.
Analysis of Operational Efficiency
In FY2024, the company managed to maintain a stable cost structure despite rising costs in research and development, which decreased by 3.8% to $1.190 billion. Selling and administrative expenses increased by 2.9% to $4.857 billion.
Notably, the company’s integration, restructuring, and transaction expenses saw a significant rise of 46.2% to $458 million, which could impact future profitability if not managed effectively.
Overall, the gross margin has shown a slight decline, reflecting pressures on pricing and cost management. However, operational efficiencies have improved, as evidenced by the increase in operating income from $2.111 billion in FY2023 to $2.425 billion in FY2024.
| Operational Efficiency Metric | FY2024 | FY2023 | % Change |
|---|---|---|---|
| Research and Development Expense | $1.190 billion | $1.237 billion | -3.8% |
| Selling and Administrative Expense | $4.857 billion | $4.719 billion | +2.9% |
| Integration, Restructuring and Transaction Expense | $458 million | $313 million | +46.2% |
Debt vs. Equity: How Becton, Dickinson and Company (BDX) Finances Its Growth
Debt vs. Equity: How Becton, Dickinson and Company Finances Its Growth
Debt Levels
As of September 30, 2024, the company reported a total long-term debt of $17.94 billion and current debt obligations of $2.17 billion. This reflects an increase from $14.74 billion in long-term debt and $1.14 billion in current debt obligations as of September 30, 2023.
| Debt Type | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Current Debt Obligations | $2.17 billion | $1.14 billion |
| Long-term Debt | $17.94 billion | $14.74 billion |
Debt-to-Equity Ratio
The debt-to-equity ratio as of September 30, 2024, stands at 0.69, calculated using total liabilities of $31.85 billion and shareholders' equity of $25.91 billion. This ratio is lower than the industry average of approximately 0.75, indicating a more conservative approach to leveraging.
Recent Debt Issuances and Credit Ratings
In fiscal year 2024, the company raised $4.52 billion in long-term debt financing, with notable refinancing activities aimed at optimizing interest expenses. The company's credit rating remains stable with an investment-grade rating from major agencies, reflecting a solid financial position despite the increased debt levels.
Balancing Debt Financing and Equity Funding
The company maintains a balanced approach to financing its growth through a combination of debt and equity. In fiscal year 2024, it reported free cash flow of $3.12 billion, providing flexibility to manage debt obligations while pursuing growth initiatives. The total dividends paid in 2024 were $1.10 billion, indicating a commitment to returning value to shareholders while strategically using debt to fund acquisitions and innovation.
| Financial Metrics | FY 2024 | FY 2023 |
|---|---|---|
| Free Cash Flow | $3.12 billion | $2.12 billion |
| Dividends Paid | $1.10 billion | $1.11 billion |
Assessing Becton, Dickinson and Company (BDX) Liquidity
Assessing Becton, Dickinson and Company's Liquidity
Current and Quick Ratios
The current ratio for the company as of September 30, 2024, is 1.54, derived from current assets of $10,468 million and current liabilities of $6,777 million. The quick ratio, which excludes inventories from current assets, stands at approximately 0.61, calculated using liquid assets of $6,625 million against current liabilities.
Working Capital Trends
As of September 30, 2024, the working capital is calculated as current assets minus current liabilities, resulting in a value of $3,691 million. This represents an increase from $3,176 million in the previous year, indicating a positive trend in liquidity management.
Cash Flow Statements Overview
The cash flow from operating activities for the fiscal year ending September 30, 2024, is reported at $3,844 million, up from $2,990 million in 2023, reflecting a growth of 28.5%. Investing activities have seen significant cash outflows, with capital expenditures of $725 million and acquisitions totaling $3,924 million. Financing activities generated $2,087 million in cash, including proceeds from long-term debt of $4,517 million.
Potential Liquidity Concerns or Strengths
Despite strong cash flow from operations, the increase in both short-term and long-term debt could pose potential liquidity concerns. The total current liabilities amount to $6,777 million, while total debt stands at $20,110 million (including current and long-term obligations). This highlights a reliance on debt financing which could impact future liquidity if cash flows do not sustain.
| Metric | 2024 | 2023 | % Change |
|---|---|---|---|
| Current Ratio | 1.54 | 1.52 | 1.32% |
| Quick Ratio | 0.61 | 0.58 | 5.17% |
| Working Capital (in millions) | $3,691 | $3,176 | 16.19% |
| Operating Cash Flow (in millions) | $3,844 | $2,990 | 28.5% |
| Capital Expenditures (in millions) | $725 | $874 | (17.0%) |
| Free Cash Flow (in millions) | $3,119 | $2,116 | 47.4% |
Is Becton, Dickinson and Company (BDX) Overvalued or Undervalued?
Valuation Analysis
The valuation analysis of the company provides insight into its financial health and market position. This section will explore key ratios, stock price trends, dividends, and analyst consensus to determine if the company is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The trailing twelve months (TTM) P/E ratio stands at 19.5. This indicates the market is willing to pay approximately $19.50 for every $1 of earnings. In comparison, the industry average P/E is 22.1, suggesting the company is currently undervalued relative to its peers.
Price-to-Book (P/B) Ratio
The P/B ratio is reported at 2.8, while the industry average is 3.0. This demonstrates a slightly lower valuation compared to the industry, indicating potential undervaluation based on book value.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is 14.2, with the industry average at 15.5. This further supports the notion that the company may be undervalued in the marketplace.
Stock Price Trends
Over the past 12 months, the stock price has experienced fluctuations, starting at approximately $250 and reaching a peak of $290 before closing at $275 recently. The stock price has shown an overall increase of 10% year-to-date, outperforming the broader market index.
Dividend Yield and Payout Ratios
The current dividend yield is 2.1%, with an annual dividend of $5.80 per share. The payout ratio stands at 39%, indicating a sustainable dividend policy with room for future growth.
Analyst Consensus on Stock Valuation
Analyst consensus indicates a majority rating of Buy, with 65% of analysts recommending the stock as a buy, 30% as hold, and only 5% suggesting sell. This positive outlook reflects confidence in the company's growth potential.
| Valuation Metric | Company Value | Industry Average | Analysis |
|---|---|---|---|
| Price-to-Earnings (P/E) | 19.5 | 22.1 | Undervalued |
| Price-to-Book (P/B) | 2.8 | 3.0 | Undervalued |
| EV/EBITDA | 14.2 | 15.5 | Undervalued |
| Stock Price (12 months) | $275 | $250 - $290 | Stable with growth |
| Dividend Yield | 2.1% | N/A | Attractive |
| Payout Ratio | 39% | N/A | Sustainable |
| Analyst Consensus | Buy (65%) | N/A | Positive outlook |
Key Risks Facing Becton, Dickinson and Company (BDX)
Key Risks Facing Becton, Dickinson and Company
Understanding the risk factors that impact the financial health of a company is crucial for investors. For Becton, Dickinson and Company, several internal and external risks have been identified that could affect its operational efficiency and profitability.
Industry Competition
The medical technology industry is highly competitive, with numerous players vying for market share. The company faces pressure from competitors that may lead to pricing pressures and reduced margins. In fiscal year 2024, the company reported revenues of $20.178 billion, a growth of 4.2% compared to the previous year, indicating a competitive landscape where growth must be continuously earned.
Regulatory Changes
Changes in regulations can significantly impact operations. The company has experienced increased costs due to compliance with new European Union Medical Device Regulations, amounting to $104 million in fiscal year 2024. Additionally, ongoing regulatory scrutiny related to product safety and efficacy can lead to operational disruptions.
Operational Risks
Operational risks include challenges in product development and market acceptance. The company reported a substantial $458 million in integration, restructuring, and transaction expenses in fiscal year 2024, which reflects costs associated with the acquisition of Edwards Lifesciences’ Critical Care product group.
Financial Risks
Financial risks include exposure to interest rate fluctuations and changes in foreign currency rates. In fiscal year 2024, the company incurred interest expenses of $528 million, an increase of 16.7% from the previous year. Moreover, foreign currency impacts have influenced revenue growth, with a negative impact of approximately 25 basis points expected in fiscal year 2025.
Strategic Risks
Strategic risks arise from the company's ability to successfully integrate acquisitions and manage its portfolio effectively. The recent acquisition of the Critical Care product group is expected to enhance growth but also presents integration challenges.
Legal and Compliance Risks
The company faces potential legal liabilities, including ongoing investigations and litigation. For example, a charge of $175 million was accrued related to an SEC investigation regarding reporting issues involving the BD Alaris™ infusion pumps. The ultimate resolution of such investigations remains uncertain and could have a material financial impact.
Market Conditions
Market conditions, including changes in healthcare spending and economic downturns, can adversely affect revenue. The company reported a 6.9% increase in total revenues for the fourth quarter of fiscal year 2024, but future growth may be hampered by macroeconomic factors.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | Pressure on pricing and margins | Revenue growth of 4.2% in FY24 |
| Regulatory Changes | Compliance with new medical device regulations | Costs of $104 million in FY24 |
| Operational Risks | Challenges in product development | Integration costs of $458 million in FY24 |
| Financial Risks | Interest rate fluctuations and currency exposure | Interest expenses of $528 million in FY24 |
| Strategic Risks | Integration of acquisitions | Potential for increased operational complexity |
| Legal and Compliance Risks | Ongoing investigations and litigation | Accrued charges of $175 million |
| Market Conditions | Healthcare spending and economic factors | 6.9% increase in Q4 revenues |
Mitigation strategies are essential for addressing these risks. The company is actively pursuing operational excellence initiatives and strategic acquisitions to enhance its market position and financial resilience.
Future Growth Prospects for Becton, Dickinson and Company (BDX)
Growth Opportunities
Future growth prospects for Becton, Dickinson and Company are driven by several key factors including product innovations, market expansions, and strategic acquisitions.
Key Growth Drivers
- Product Innovations: The company has launched several new products, including the BD Intraosseous Vascular Access System, and has introduced AI-enabled clinical decision tools through its recent acquisition of Edwards Lifesciences’ Critical Care product group.
- Market Expansions: The Integrated Diagnostic Solutions business unit announced Health Canada approval for the BD Onclarity HPV Assay, allowing for home testing with self-collected specimens.
- Acquisitions: The acquisition of Edwards Lifesciences’ Critical Care product group enhances BD's portfolio, particularly in smart connected care solutions.
Future Revenue Growth Projections
For fiscal year 2025, the company projects:
- Total Revenues: Expected to be between $21.9 billion and $22.1 billion, reflecting a growth of 8.9% to 9.4% compared to FY24.
- Organic Revenue Growth: Projected at 4.0% to 4.5%.
- Adjusted Diluted EPS: Guidance set at $14.25 to $14.60, indicating a growth of approximately 10% at the midpoint.
Strategic Initiatives and Partnerships
The company continues to focus on strategic partnerships and initiatives that leverage technological advancements:
- The integration of AI technologies into product offerings is expected to enhance operational efficiency and patient outcomes.
- Continued investment in R&D, with $1.19 billion allocated in FY24, is aimed at advancing innovations in healthcare.
Competitive Advantages
BD's competitive advantages include:
- A strong portfolio of innovative products that address significant healthcare challenges, enhancing its market position.
- A robust global presence, with revenues of $20.18 billion for FY24, allowing for diversified market reach.
- Operational efficiencies achieved through the BD Excellence system, which has driven margin expansion and earnings growth.
| Metric | FY24 Actual | FY25 Projection |
|---|---|---|
| Total Revenues | $20.18 billion | $21.9 - $22.1 billion |
| Organic Revenue Growth | 5.0% | 4.0% - 4.5% |
| Adjusted Diluted EPS | $13.14 | $14.25 - $14.60 |
| R&D Investment | $1.19 billion | N/A |
These growth opportunities position the company favorably for future expansion and increased shareholder value.
Becton, Dickinson and Company (BDX) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Becton, Dickinson and Company (BDX) Financial Statements – Access the full quarterly financial statements for Q4 2024 to get an in-depth view of Becton, Dickinson and Company (BDX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Becton, Dickinson and Company (BDX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.