CR Bard (BCR) operates mainly in vascular, urology, oncology and surgical specialty products. Most of products are disposable products which makes sales of company recurring and stable. Company was founded in 1907 year and history of increasing dividends is impressive.

Split of sales in segments is presented below:

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Well diversified business. On the other hand If we look on 2016 guidance we can see that expected growth is decent.

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Emerging markets are around 10% of revenues – I see a further potential for growth. As societies in EM are getting richer they spend more money on healthcare.

 

As it comes to financials (estimates):

Market cap ~ $14.6B

Net debt ~$0.5B

Payout ratio ~10%

Beta = 0.66

Dividend yield 0.5% + buyback, low single digit % yield.

 

Estimated valuation ratios:

EV/EBITDA = 12.6

P/E =19.7

 

CR Bard is one of The Dividend Aristocrats paying increasing dividends since 1972 year. Currently dividend yield is around 0.5% – very low, as historically company was paying around 2% before 2002 year, then 1% and now around 0.5%. On the other hand payout ratio is low and I see some potential for higher dividends. Moreover company is buying back shares, low single digit percent per year. Overall in my opinion quite low transfers of cash to shareholders.

 

Drawdown risk analysis:

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Dividend yield is low, valuation is high, shares of BCR are at all time high. I see no story. I will come back at $150 and look closer (then EV/EBITDA < 10).

 

Summing up, CR Bard is like Coca-Cola in consumer business – everyone should have it in portfolio. The question is price to build position, which is currently too high in my opinion.

 

Disclosure BCR – no position