In a deal that makes sense for both sides, Becton Dickinson is buying Edwards' Critical Care business for $4.2 billion. We're maintaining our fair value estimates for both companies as the price tag doesn't appear excessive and the strategic fit and growth prospects for the business improve under the BD's umbrella.
Edwards' efforts to focus on efficiency and higher-margin products have paid off, as gross margins increased from 47% in 2000 to 77% in 2023.
Edwards' ambitions to diversify into minimally invasive medical technologies place the firm in direct competition with much larger competitors, such as Medtronic and Abbott, which can easily bid up prices for emerging technologies that Edwards couldn't match.
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Metric
|
EW
|
MDT
|
ABT
|
|---|---|---|---|
Price/Earnings (Normalized) | 34.12 | 15.80 | 24.51 |
Price/Book Value | 7.36 | 2.20 | 4.82 |
Price/Sales | 8.61 | 3.46 | 4.66 |
Price/Cash Flow | 36.29 | 15.38 | 18.82 |
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Metric
|
EW
|
MDT
|
ABT
|
|---|---|---|---|
Quick Ratio | 2.32 | 1.46 | 1.16 |
Current Ratio | 3.75 | 2.30 | 1.64 |
Interest Coverage | — | 8.86 | 10.86 |
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Metric
|
EW
|
MDT
|
ABT
|
|---|---|---|---|
Return on Assets (Normalized) | 16.80% | 7.75% | 10.63% |
Return on Equity (Normalized) | 23.64% | 13.75% | 20.87% |
Return on Invested Capital (Normalized) | 20.49% | 9.87% | 14.81% |
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1-Day Chart
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Name
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Price
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Morningstar Rating for Stocks
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Capital Allocation
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Economic Moat
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Market Cap
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|---|---|---|---|---|---|---|
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ABT
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