8 Most Promising Medical Stocks According to Hedge Funds

2. Becton, Dickinson and Company (NYSE:BDX)

Number of Hedge Fund Holders: 65 

Becton, Dickinson and Company (NYSE:BDX) is a global medical technology company that develops, manufactures, and sells a diverse array of medical supplies, devices, laboratory equipment, and diagnostic products. The company provides essential tools and technologies utilized by healthcare professionals, researchers, and patients worldwide.

Becton, Dickinson and Company (NYSE: BDX) offers a diverse range of products, including drug detectors, catheters, inventory optimization systems, and drug collection products. With trailing twelve-month revenues of $19.8 billion and cash equivalents of $1.4 billion, the company benefits from economies of scale that help maintain high margins. However, these economies also require consistent revenue growth to avoid margin compression from high operating expenses. The stock has declined 3.4% year-to-date, primarily due to flat international revenue of $2.1 billion, which accounts for 42% of sales, largely affected by a slowdown in China. Additionally, the company’s pharmaceutical and biomedical segments have not shown growth, leading to a modest 3.2% revenue increase over the nine months ending in June, while expenses rose by 3.5%.

To mitigate some of its growth challenges, Becton, Dickinson and Company (NYSE:BDX) is focusing on acquisitions. Here’s what management shared on this front during the Q3 2024 earnings call:

“Today, BD has a $4 billion-plus business in health care automation and informatics AI and we’ll increase this to over $5 billion as we complete the acquisition of Critical Care. This expands BD in the smart critical care space and creates new opportunities to combine AI-driven monitoring with systems such as infusion technologies to simplify nursing workflow and improve patient care. Looking ahead to 2030, we view health care process automation and informatics AI as having the potential to become a business exceeding $7 billion as we continue to build more connected, automated, and intelligent solutions to transform the core processes underlying care delivery.”