The 10 Most Recession-Proof Dividend Aristocrats

#5 – Becton, Dickinson (BDX)

• 2007 through 2009 total return of 17.5% (versus -15.9% for the S&P 500)
• 2007 through 2009 maximum drawdown of 34.1% (versus 55.2% for the S&P 500)

Becton, Dickinson and Co. (NYSE:BDX) is a medical instruments and supplies corporation with a market cap of $28.9 billion. The company was founded in 1897 and has paid increasing dividends for 43 consecutive years.

BDX has compounded earnings-per-share at 9.0% a year over the last decade. Dividends have grown even faster, at 13.1% a year. The company currently has a payout ratio of around 35%… It is likely management will continue to increase dividends at a faster pace than overall earnings over the next several years.

The Great Recession caused many businesses (AIG, Bear Stearns, Bank of America, General Motors) to lose billions. Becton, Dickinson and Co. (NYSE:BDX) grew earnings-per-share each year through the Great Recession:

• 2007 earnings-per-share of $3.84
• 2008 earnings-per-share of $4.46
• 2009 earnings-per-share of $4.95

People do not put off medical procedures or hospital visits because the economy is bad. This creates demand for BDX’s medical instruments and supplies regardless of the overall economy. The health care sector in general is one of the most recession resistant – along with low-priced consumer goods. These are items people simply do not (or cannot) cut back on.

Becton, Dickinson and Co. (NYSE:BDX) is currently trading for a price-to-earnings ratio of around 20. This is a bit over the S&P 500’s current price-to-earnings ratio, but reflects the solid growth prospects and safety of BDX. The company appears to be trading around fair value at current prices. Quant hedge fund RenTech had a large position in BDX at the end of June.