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Becton, Dickinson (BDX) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Explore Becton, Dickinson (BDX) Piotroski F-Score Analysis for 2023. Comprehensive financial insights, with a final score of 5/9.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 5

We're running Becton, Dickinson (BDX) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
1
Number of shares not diluted?
0
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
1

The Piotroski F-Score evaluates a company's financial strength on a scale of 0 to 9 based on 9 criteria. We're analyzing Becton, Dickinson (BDX) to assess its profitability, liquidity, and efficiency. BDX scored 5 out of 9, indicating a mixed financial position: strong in some areas but needing improvement in others. Key findings include a positive net income and cash flow, but challenges in ROA and gross margin. Also, despite increasing current ratio, there are concerns in leverage, shares dilution, and declining gross margin.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski score of 5, Becton, Dickinson (BDX) has both strengths and weaknesses. The positive net income and cash flow suggest financial stability, but issues with ROA, leverage, and gross margin reflect potential risks. It's worth keeping an eye on BDX, especially if the company can address these areas of concern. However, investors might want to consider other stocks with higher Piotroski scores or more consistent financial health.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Becton, Dickinson (BDX)

Company has a positive net income?

A positive net income signifies profitability and financial health of the company. It's key for investors as it indicates the company is generating earnings that can be reinvested or returned to shareholders.

Historical Net Income of Becton, Dickinson (BDX)

For 2023, Becton, Dickinson (BDX) reported a net income of $1.484 billion, which is positive. Over the last 20 years, the net income has shown a general upward trend with certain fluctuations. The highest net income was seen in 2021 with $2.092 billion, but recent years show smaller yet stable profits. This positive net income earns BDX 1 point based on Piotroski criteria.

Company has a positive cash flow?

Cash Flow from Operations (CFO) represents the amount of cash generated by a company's regular business operations. It is crucial to ensuring that the company can maintain and expand its operations over time.

Historical Operating Cash Flow of Becton, Dickinson (BDX)

The Cash Flow from Operations (CFO) in 2023 stands at $2,989 million, which is a positive figure, thereby earning 1 point in the Piotroski Analysis. Analyzing the historical data, it becomes clear that Becton, Dickinson has maintained a consistently positive CFO over the past two decades. The lowest CFO recorded was $905.7 million in 2003, and since then, the company has not witnessed any negative CFO years. Evidently, the CFO figure has shown a general upward trend, with significant spikes in 2016 and ranging more notably in 2020 and 2021. This positive and stable cash flow trend is a strong indicator of the company’s robust and efficient operational management.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) signifies how effectively a company is utilizing its assets to generate profit. An increase indicates improved efficiency and profitability.

Historical change in Return on Assets (ROA) of Becton, Dickinson (BDX)

Comparing Becton, Dickinson's ROA, it decreased from 0.0333 in 2022 to 0.0281 in 2023. This trend is unfavorable and results in a score of 0. This decline implies a reduced efficiency in asset utilization to generate profits, highlighting potential areas for operational improvement. Historically, this dip is also below the industry median ROA, which is concerning.

Operating Cashflow are higher than Netincome?

The criterion compares Operating Cash Flow against Net Income to assess the quality of a company's earnings and cash generation ability.

Historical accruals of Becton, Dickinson (BDX)

For Becton, Dickinson (BDX) in 2023, the Operating Cash Flow is $2.989 billion, whereas the Net Income is $1.484 billion. The Operating Cash Flow is higher than the Net Income, resulting in a score of 1 on this Piotroski criterion. This is a positive trend, indicating that BDX is generating sufficient cash from its operations, exceeding its net income. Over the past 20 years, BDX has generally shown strong Operating Cash Flow, often surpassing Net Income, which further enhances their financial stability and capacity to reinvest in growth.

Liquidity of Becton, Dickinson (BDX)

Leverage is declining?

Change in leverage is crucial as it indicates if a company's use of debt is increasing or decreasing over time. Lower leverage generally suggests decreased risk.

Historical leverage of Becton, Dickinson (BDX)

Becton, Dickinson's leverage increased from 0.2623 in 2022 to 0.2792 in 2023, indicating a higher reliance on debt. This increase means a 0-point score for the Piotroski criterion. Analysing the last 20 years of data reveals fluctuations, with the most notable highs around 2017 at 0.4947 and the current level remaining moderate and historically low post-pandemic.

Current Ratio is growing?

Current Ratio measures a company's ability to pay short-term obligations with short-term assets. It is a key indicator of liquidity.

Historical Current Ratio of Becton, Dickinson (BDX)

For Becton, Dickinson (BDX), the Current Ratio has increased from 1.0422 in 2022 to 1.3064 in 2023. This increase signifies an improvement in the company's liquidity position, suggesting that it is better equipped to handle its short-term liabilities. Over the last 20 years, the Current Ratio has seen significant fluctuations, peaking at 5.5754 in 2017 and going as low as 1.027 in 2018. Comparatively, the industry median has generally remained around 2.5-3, indicating that BDX has been below the industry norm in recent years, although the upward trend in 2023 is a positive sign for the company's financial health. Thus, for this criterion, BDX earns 1 point.

Number of shares not diluted?

Change in shares outstanding refers to the change in the total number of shares issued by a company. It’s important because an increase in shares outstanding can dilute earnings per share (EPS), while a decrease usually indicates share buybacks, which can be positive.

Historical outstanding shares of Becton, Dickinson (BDX)

In 2022, Becton, Dickinson (BDX) had 285,005,000 outstanding shares, which increased to 286,282,000 in 2023. This increase in outstanding shares is not favorable in the context of the Piotroski F-Score, resulting in a 0 score for this criterion. Historically, BDX has seen fluctuations in its shares outstanding over the past 20 years, with significant increases from 223,588,000 in 2017 to 264,621,000 in 2018, and consistent yearly increases since 2019. This trend indicates ongoing share issuance or lesser buyback activity, potentially diluting shareholder value.

Operating of Becton, Dickinson (BDX)

Cross Margin is growing?

Gross Margin is a company's total sales revenue minus its cost of goods sold (COGS), divided by total sales revenue. It shows the amount of profit made before deducting other business expenses.

Historical gross margin of Becton, Dickinson (BDX)

Becton, Dickinson's Gross Margin decreased from 0.4492 in 2022 to 0.4217 in 2023. Hence, there is no point awarded according to Piotroski criteria. This decline illustrates a reduction in efficiency at turning revenues into actual profit. When comparing this trend to its historical data, it's evident that 2023's Gross Margin is among the lowest in the past two decades. Further, it's lower than the industry median Gross Margin of 0.5549, indicating both an internal challenge and a loss of competitive edge in cost management.

Asset Turnover Ratio is growing?

Asset Turnover measures the efficiency of a company's use of its assets in generating sales revenue. It is calculated by dividing sales by total assets.

Historical asset turnover ratio of Becton, Dickinson (BDX)

In 2023, Becton, Dickinson (BDX) has an Asset Turnover of 0.3665, compared to 0.3533 in 2022, showing an increase in efficiency. Historically, BDX has seen a general decline in Asset Turnover over the past 20 years, from 0.8533 in 2003 to a low of 0.3037 in 2020, reflecting challenges in asset efficiency. However, the recent increase indicates a positive trend as the company is improving its asset utilization. Given the increase from 2022 to 2023, BDX earns 1 point for this criterion, signifying better operational efficiency.


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