BD’s latest dividend increase
On November 20, 2017, BD (BDX) announced an increase in its quarterly dividends. The company declared a dividend of $0.75 per share for 1Q18, which will be payable on December 29, 2017, to shareholders of record as of December 8, 2017. The announced dividend is ~2.7% higher than the last quarterly dividend of $0.73 per share. BD’s annual dividend rate stands at $3 per share for fiscal 2018. The company’s current dividend yield is 1.3%.
As of November 28, 2017, peers Medtronic (MDT), Abbott Laboratories (ABT), and Zimmer Biomet (ZBH) had dividend yields of 2.2%, 1.9%, and 0.83%, respectively. Investors seeking dividend-focused exposure to BD could consider the Vanguard Dividend Appreciation ETF (VIG), which has a ~1.3% exposure to BD.
BD’s dividend and share repurchase strategy
BD is a dividend aristocrat, in that it has paid consistently higher dividends to its shareholders for at least 25 years. Increasing dividends is one of BD’s key goals for fiscal 2017 through fiscal 2019. It marked its 45th year of increasing dividend payments in fiscal 2017. The latest dividend increase for 1Q18 represents the forty-sixth consecutive annual increase in dividends. In fiscal 2017, BD paid out dividends of $677 million, with a quarterly dividend of $0.73 per share.
BD bought back shares worth $220 million during fiscal 2017. Around 1.3 million shares were repurchased through the proceeds of the company’s respiratory solutions business divestiture in 1Q17. However, the company has not announced any plans for further share repurchases due to the acquisition of C. R. Bard, which has added significant debt to the company’s balance sheet. At the end of fiscal 2017, BD’s total debt-to-capital ratio was 57.5%.