For the last week or so, we’ve been sitting on Becton, Dickinson (NYSE:BDX), waiting for the right time to buy (to see an archived copy of that Rhino Alert, click here). Well, that time’s now here. Here’s why…

The argument for adding Becton to our watchlist was simple: the stock has the defensive posturing of an $18 billion blue chip, but the growth that you’d expect to find in a much smaller, more agile company. And with economic expectations far from clear at the onset of 2010, those factors are exactly what we’re looking for in a new Rhino Stock pick.

Becton develops, manufactures, and distributes complex high-margin medical equipment, including oncology and pathology diagnostic devices, but the company’s bread and butter is in basic surgical instruments like needles, syringes, and scalpels. That focus on medical necessities have given Becton a fairly soft cushion in spite of economic conditions that have been less kind to medical equipment makers who focus exclusively on high-tech, capital-intensive products.

Becton’s products are divided into three segments: medical, diagnostic, and biosciences. BD Medical focuses on the injection, infusion, and surgical products that we just talked about. Though that space is the most recession resistant of the three, it’s also the most crowded by the competition. Large medical suppliers like Abbott Labs (NYSE:ABT) and Roche (OTC:RHHBY) also fight for market share, and with little difference between one scalpel and another, price becomes the competing point – much to the chagrin of investors.

That’s one area where Becton, Dickinson shines… The company has devoted resources to set its medical division apart by adding innovative safety and convenience features – like syringes that are designed to prevent inadvertent needle sticks – gaining competitive advantages and protecting tight instrument margins at the same time.

Get Our Free Newsletter by Email