Key Points
Dividend King Becton, Dickinson has an incredible dividend history and an attractive yield.
Medtronic's dividend history is impressive, but the real draw is the growth potential of its new surgical robot.
Most investors don't associate the healthcare sector with dividends, but there are some pretty impressive dividend stocks to be had. Two that stand out today are Becton, Dickinson(NYSE: BDX) and Medtronic(NYSE: MDT). Here's why these unstoppable dividend stocks could find a home in your portfolio today.
Becton, Dickinson is a Dividend King
The big dividend story with Becton, Dickinson is that it has increased its dividend annually for more than 50 years, placing it on the highly elite list of Dividend Kings. Becton, Dickinson isn't really a headline player, like Eli Lilly is with its dominant GLP-1 drugs. Becton, Dickinson is more of a "pick-and-shovel" play, with a large medical-surgical business (basics like syringes) and medical device operations, among other things.
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The company hasn't been executing well of late, but it has a pipeline of new products that should help to get the company moving in the right direction again. And it just completed the spinoff of a division that didn't fit well with the rest of its business. That should allow management to focus more keenly on returning to growth.
Add in a well-above-market 2.4% yield, and dividend investors who think in decades may want to consider jumping aboard while Wall Street is still downbeat on the stock.
Medtronic is setting itself up for growth
Medical device peer Medtronic is just a couple of years shy of Dividend King status. So its dividend bona fides are very strong as well. The stock's dividend yield is an even more attractive 2.9%. Like Becton, Dickinson, Medtronic has been working through a weak patch. However, that could be on the verge of changing.
Medtronic has just begun selling surgical robots in the U.S. market. It is a potentially large growth opportunity, noting surgical robotics leader Intuitive Surgical has been afforded a P/E ratio of 63x because of its strong growth. Medtronic's P/E is a far more modest 27x.
While it has a more diverse business, it seems reasonable to expect the market to reward Medtronic with a higher valuation based on its surgical robotics advances.
Two reliable dividend stocks
If you have $1,000 or even less, you'll be able to buy Becton, Dickinson and Medtronic. In fact, $1K will let you buy five shares of Dividend King Becton, Dickinson, or 10 shares of aspiring Dividend King Medtronic. Either one could be a solid healthcare stock for your dividend portfolio, but don't wait too long, as both now have catalysts that may spur higher valuations.
Should you buy stock in Becton right now?
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Reuben Gregg Brewer has positions in Medtronic. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool recommends Medtronic and recommends the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.
