Leading global medical technology company, Becton, Dickinson and Company (NYSE:BDX) , popularly known as BD, recently announced a follow-on offering of $4.5 billion for its shares. Of these $2.25 billion consists of common stock while the remaining $2.25 billion are depositary shares.
Stock Performance
Year to date, Becton shares have increased roughly 8.61% comparing unfavorably with the Zacks categorized Medical/Dental-Supplies’ sub-industry’s addition of 11.41%. The current level is also lower than the S&P 500’s return of 8.87% in the same time frame.
More About the Offering
Coming back to the news, Becton’s common stock intended for the offering is valued at par of $1.00 per share. Of the depositary shares, each represents 0.05% interest in its mandatory convertible preferred stock with a par value $1.00 per share.
The company intends to use the proceeds from the offerings to finance a portion of the cash consideration payable in connection with its planned acquisition of C. R. Bard Inc. (NYSE:BCR) . The acquisition is expected to close in the fall of 2017. We believe the combined company will have a larger presence in medication management and infection prevention space and bolster its foothold in the global medical devices market, which is expected to reach a worth of $543.9 billion by 2020.
Based in Franklin Lakes, NJ, Becton, Dickinson is a medical technology company engaged principally in the development, manufacture and sale of medical devices, instrument systems and reagents.
Going forward, BD’s focus on product launches is a significant catalyst in our view. Additionally, its expansion plans, especially in the emerging overseas markets and the acquisition-driven strategy hold considerable promise.
On the flipside, lower demand for healthcare products, intensifying competition, significant exposure to foreign exchange volatility and higher debt levels pose major headwinds.
Zacks Rank & Stocks to Consider
Becton has a Zacks Rank #3 (Hold).
Better-ranked medical stocks include, Baxter International Inc. (NYSE:BAX) and Bio-Rad Laboratories, Inc. (NYSE:BIO) . Baxter International sports a Zacks Rank 1 (Strong Buy) while Bio-Rad Laboratories carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Baxter International rose around 21.0% in the last one year, in comparison to the S&P 500’s 16.1%. It has a four-quarter average earnings surprise of 17.14%.
Bio-Rad Laboratories gained 57.2% in the past one year, better than the S&P 500 mark. It has a four-quarter average earnings surprise of 13.10%.
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