Credit: Shutterstock photoWhat's Happening
Medical instruments and supply manufactured Becton Dickinson ( BDX ) is a dividend aristocrat, with a 45-year streak of dividend increases. The company will likely extend that streak when it announces its next distribution this week, and the stock has gained 35.0% on the year.
Technical Analysis
BDX was recently trading at $222.87, down $2.36 from its 12-month high and $61.58 above its 12-month low. Technical indicators for BDX are bullish and the stock is in a strong upward trend. The stock has recent support above $217.50 and has recent resistance below $225.25. Of the 15 analysts who cover the stock, nine rate it a "strong buy", and six rate it a "hold". BDX gets a score of 79 from InvestorsObserver's Stock Score Report.
Analyst's Thoughts
BDX has an impressive 45-year streak of increases, and with a low payout ratio of 27.5%, the company can easily afford another increase when it announces its next dividend increase this week. The company tends to announce its dividend increases during the third week of November, so this year's increase could be coming any day. Last year the company boosted its dividend by 10.6%, and given the low payout ratio, I would look for a similar increase this year as well. Look for the quarterly distribution to rise from $0.73 to around $0.81, for an increase of 10.9%. Look for the announcement this week, with the stock trading ex-dividend during the first half of December.
Stock Only Trade
If you're looking to establish a long stock position in BDX, consider buying the stock under $223.00. Sell if it falls below $201.00 or take profits if it gets to $257.00.Bullish Trade
If you want to set up a bullish hedged trade on BDX, consider a January 195/200 bull-put credit spread for a 35-cent credit. That's a potential 7.5% return (39.3% annualized*) and the stock would have to fall 10.1% to cause a problem.
Bearish Trade
If you want to take a bearish stance on the stock at this time, consider a March 240/250 bear-call credit spread for a 90-cent credit. That's a potential 9.9% return (28.7% annualized*) and the stock would have to rise 8.1% to cause a problem.
Covered Call Trade
There are no covered calls that we like on the stock at this time.The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Originally published on InvestorsObserver.com
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
