The Healthcare Stock Built for Investors Who Prioritize Capital Preservation
Key Points
Becton, Dickinson has been increasing its dividend for more than 50 consecutive years.
While diversified, much of its revenue comes from recurring sales of medical supplies.
Wanting to invest in healthcare is a savvy instinct. It is, after all, a major expense in America. Per the Peterson-KFF Health System Tracker, "On a per capita basis, total health spending, including government, private, out-of-pocket, research, and infrastructure spending, has increased in the last five decades from $353 per year in 1970 to $15,474 per year in 2024."
It can still be vexing, though, to figure out which healthcare stocks are likely to serve you best over the coming years. I'd like to suggest one for your consideration: Becton, Dickinson (NYSE: BDX) -- which also goes by the moniker "BD." It should not only grow for you over time, but it also offers a degree of capital preservation, putting your dollars at less risk than some other healthcare concerns might.
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Why Becton, Dickinson?
I like this stock for multiple reasons. It's not purely focused on an aspect of healthcare that faces challenges. For example, pharmaceutical companies are being pressured to sharply lower their prices by the Trump administration, and while that can be great for patients, it can present a big profit-shrinking headwind for drugmakers.
Similarly, care providers such as doctors and hospitals are at risk of seeing their payment systems changed -- and very likely of treating fewer patients, due to Medicaid cuts. Some hospitals may even be forced to close. Becton, Dickinson, though, gets much of its revenue from products such as syringes, blood collection tubes, catheters, infusion systems, and so on -- which will always be needed, providing recurring revenue.
It's also a dividend-paying stock, with a solid recent dividend yield of 2.7%. Better still, that payout has been growing, from a quarterly $0.83 in 2021 to $1.05 in 2026, reflecting an average annual growth rate of 5%. Indeed, the company has hiked its payout annually for more than 50 years.
The company is also rewarding shareholders by repurchasing stock. It bought back $250 million worth of shares so far in 2026 (as of late January), and has authorized the purchase of 10 million additional shares. Stock buybacks suggest that management sees the stock as undervalued, and they also reflect a company geared toward rewarding shareholders.
Becton, Dickinson's stock is attractively priced at recent levels, with a recent forward-looking price-to-earnings (P/E) ratio of 12, well below the five-year average of 17. That relatively low price means that Becton, Dickinson offers a margin of safety to investors. As it doesn't seem wildly overvalued, it's not likely to pull back sharply during a market downturn. (Remember -- there will always be occasional market downturns.)
It has disappointed investors in the recent past, but it has been working on turning itself around. While investors wait, they can collect a solid dividend income stream.
Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.