C R Bard Inc Valuation – March 2017 $BCR

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – March 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how C R Bard Inc (BCR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): C. R. Bard, Inc. (Bard) is engaged in designing, manufacturing, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. The Company operates through the manufacture and sale of medical devices segment. It sells a range of products to hospitals, individual healthcare professionals, extended care facilities and alternate site facilities on a global basis. Its vascular products cover a range of minimally invasive devices for the treatment of peripheral vascular disease and end-stage renal disease. Its urology products include basic urology drainage products, fecal and urinary continence products, urological specialty products and Targeted Temperature Management products. Its oncology products cover a range of devices used in the treatment and management of various cancers, and other diseases and disorders. Its surgical specialty products include implanted patches and fixation devices for hernia and soft tissue repairs.

BCR Chart

BCR data by YCharts

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ModernGraham Valuation of BCR – March 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $18,187,573,081 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.09 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 45.67% Pass
6. Moderate PEmg Ratio PEmg < 20 35.05 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 11.23 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.09 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.36 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $7.14
MG Growth Estimate 2.29%
MG Value $93.40
Opinion Overvalued
MG Grade C+
MG Value based on 3% Growth $103.52
MG Value based on 0% Growth $60.68
Market Implied Growth Rate 13.27%
Current Price $250.22
% of Intrinsic Value 267.90%

C R Bard Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $6.19 in 2013 to an estimated $7.14 for 2017. This level of demonstrated earnings growth does not support the market’s implied estimate of 13.27% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into C R Bard Inc revealed the company was trading above its Graham Number of $76.94. The company pays a dividend of $1 per share, for a yield of 0.4% Its PEmg (price over earnings per share – ModernGraham) was 35.05, which was above the industry average of 32.29. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-17.48.

C R Bard Inc receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$17.48
Graham Number $76.94
PEmg 35.05
Current Ratio 2.09
PB Ratio 11.23
Current Dividend $1.00
Dividend Yield 0.40%
Number of Consecutive Years of Dividend Growth 20

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2016
Total Current Assets $2,316,400,000
Total Current Liabilities $1,108,900,000
Long-Term Debt $1,641,700,000
Total Assets $5,306,100,000
Intangible Assets $2,270,500,000
Total Liabilities $3,631,000,000
Shares Outstanding (Diluted Average) 75,200,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $11.55
Dec2016 $7.03
Dec2015 $1.77
Dec2014 $3.76
Dec2013 $8.39
Dec2012 $6.16
Dec2011 $3.69
Dec2010 $5.32
Dec2009 $4.60
Dec2008 $4.05
Dec2007 $3.84
Dec2006 $2.55
Dec2005 $3.12
Dec2004 $2.82
Dec2003 $1.60
Dec2002 $1.47
Dec2001 $1.38
Dec2000 $1.05
Dec1999 $1.14
Dec1998 $2.26
Dec1997 $0.63

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $7.14
Dec2016 $5.10
Dec2015 $4.34
Dec2014 $5.57
Dec2013 $6.19
Dec2012 $4.98
Dec2011 $4.36
Dec2010 $4.49
Dec2009 $3.93
Dec2008 $3.49
Dec2007 $3.07
Dec2006 $2.56
Dec2005 $2.40
Dec2004 $1.91
Dec2003 $1.42
Dec2002 $1.37
Dec2001 $1.31

Recommended Reading:

Other ModernGraham posts about the company

C R Bard Inc Valuation – August 2016 $BCR
C.R. Bard Inc Stock Valuation – February 2016 $BCR
C.R. Bard Inc. Valuation – November 2015 Update $BCR
C.R. Bard Inc. Analysis – August 2015 Update $BCR
The Best Companies of the Medical Industry – June 2015

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Mettler-Toledo International Inc Valuation – Initial Coverage $MTD
Envision Healthcare Corp Valuation – Initial Coverage $EVHC
UnitedHealth Group Inc Valuation – February 2017 $UNH
Davita Inc Valuation – February 2017 $DVA
Steris PLC Valuation – Initial Coverage $STE

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

C R Bard Inc Valuation – August 2016 $BCR

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – August 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how C R Bard Inc (BCR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): C. R. Bard, Inc. (Bard) and its subsidiaries are engaged in designing, manufacturing, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. The Company sells its products to hospitals, individual healthcare professionals, extended care facilities and alternate site facilities. It operates through the manufacturing and sale of medical devices segment. Its vascular products cover a range of minimally invasive devices for the treatment of peripheral vascular disease (PVD), end-stage renal disease (ESRD) and heart arrhythmias. Its urology products include basic urology drainage products, fecal and urinary continence products, urological specialty products and Targeted Temperature Management products. Its oncology products cover a range of devices used in the treatment and management of various cancers and other diseases and disorders. Its surgical specialty products include implanted grafts and fixation devices for hernia and soft tissue repairs.

BCR Chart

BCR data by YCharts

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To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of BCR – August 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $15,691,894,599 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.36 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 15.13% Fail
6. Moderate PEmg Ratio PEmg < 20 37.92 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 9.99 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.36 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.30 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

BCR value chart August 2016

EPSmg $5.70
MG Growth Estimate 2.16%
MG Value $73.15
Opinion Overvalued
MG Grade B-
MG Value based on 3% Growth $82.70
MG Value based on 0% Growth $48.48
Market Implied Growth Rate 14.71%
Current Price $216.29
% of Intrinsic Value 295.69%

C R Bard Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years, and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $4.98 in 2012 to an estimated $5.7 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 14.71% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into C R Bard Inc revealed the company was trading above its Graham Number of $66.43. The company pays a dividend of $0.96 per share, for a yield of 0.4% Its PEmg (price over earnings per share – ModernGraham) was 37.92, which was below the industry average of 40.07, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-19.22.

C R Bard Inc performs fairly well in the ModernGraham grading system, scoring a B-.

Stage 3: Information for Further Research

BCR charts August 2016

Net Current Asset Value (NCAV) -$19.22
Graham Number $66.43
PEmg 37.92
Current Ratio 2.36
PB Ratio 9.99
Current Dividend $0.96
Dividend Yield 0.44%
Number of Consecutive Years of Dividend Growth 20

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2016
Total Current Assets $2,185,200,000
Total Current Liabilities $926,400,000
Long-Term Debt $1,640,500,000
Total Assets $5,258,200,000
Intangible Assets $2,355,100,000
Total Liabilities $3,630,400,000
Shares Outstanding (Diluted Average) 75,200,000

Earnings Per Share History

Next Fiscal Year Estimate $8.85
Dec2015 $1.77
Dec2014 $3.76
Dec2013 $8.39
Dec2012 $6.16
Dec2011 $3.69
Dec2010 $5.32
Dec2009 $4.60
Dec2008 $4.05
Dec2007 $3.84
Dec2006 $2.55
Dec2005 $3.12
Dec2004 $2.82
Dec2003 $1.60
Dec2002 $1.47
Dec2001 $1.38
Dec2000 $1.05
Dec1999 $1.14
Dec1998 $2.26
Dec1997 $0.63
Dec1996 $0.81

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $5.70
Dec2015 $4.34
Dec2014 $5.57
Dec2013 $6.19
Dec2012 $4.98
Dec2011 $4.36
Dec2010 $4.49
Dec2009 $3.93
Dec2008 $3.49
Dec2007 $3.07
Dec2006 $2.56
Dec2005 $2.40
Dec2004 $1.91
Dec2003 $1.42
Dec2002 $1.37
Dec2001 $1.31
Dec2000 $1.24

Recommended Reading:

Other ModernGraham posts about the company

C.R. Bard Inc. Valuation – November 2015 Update $BCR
C.R. Bard Inc. Analysis – August 2015 Update $BCR
The Best Companies of the Medical Industry – June 2015
47 Companies in the Spotlight This Week – 5/16/15

Other ModernGraham posts about related companies

Cerner Corporation Valuation – August 2016 $CERN
Stryker Corporation Valuation – August 2016 $SYK
Henry Schein Inc Valuation – July 2016 $HSIC
Quest Diagnostics Inc Valuation – July 2016 $DGX
Tenet Healthcare Corp Valuation – July 2016 $THC
Laboratory Corp of America Holdings Valuation – July 2016 $LH
Medtronic PLC Valuation – July 2016 $MDT
Intuitive Surgical Inc Valuation – July 2016 $ISRG
Cardinal Health Inc Valuation – July 2016 $CAH
PerkinElmer Inc Valuation – July 2016 $PKI

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

C.R. Bard Inc Stock Valuation – February 2016 $BCR

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today – February 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how C.R. Bard Inc (BCR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): C. R. Bard, Inc. (Bard) and its subsidiaries are engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. . The Company reports its sales in four major product group categories: vascular, urology, oncology and surgical specialty. The Company also has a product group of other products. The Company’s vascular products cover a range of minimally invasive devices for the treatment of peripheral vascular disease and heart arrhythmias. Its urology products include basic urology drainage products, fecal and urinary continence products, urological specialty products and Targeted Temperature Management products. Its oncology products cover a range of devices used in the treatment and management of various cancers and other diseases and disorders. Its surgical specialty products include implanted patches and fixation devices for hernia and other soft tissue repairs, in addition to hemostats and surgical sealants.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
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Downloadable PDF version of this valuation:

ModernGraham Valuation of BCR

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $14,148,878,779 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.66 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 23.30% Fail
6. Moderate PEmg Ratio PEmg < 20 31.12 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 9.74 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.66 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.38 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

BCR value chart February 2016

EPSmg $6.04
MG Growth Estimate 3.19%
MG Value $89.87
Opinion Overvalued
MG Grade C+
MG Value based on 3% Growth $87.63
MG Value based on 0% Growth $51.37
Market Implied Growth Rate 11.31%
Current Price $188.06
% of Intrinsic Value 209.25%

C R Bard Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings growth over the last ten years, and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $4.98 in 2012 to an estimated $6.04 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 11.31% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price. C R Bard Inc receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

BCR charts February 2016

Net Current Asset Value (NCAV) -$18.49
Graham Number $66.14
PEmg 31.12
Current Ratio 1.66
PB Ratio 9.74
Dividend Yield 0.49%
Number of Consecutive Years of Dividend Growth 20

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information Dec2015
Total Current Assets $2,093,200,000
Total Current Liabilities $1,261,800,000
Long-Term Debt $1,147,800,000
Total Assets $4,942,900,000
Intangible Assets $2,159,700,000
Total Liabilities $3,487,600,000
Shares Outstanding (Diluted Average) 75,400,000

Earnings Per Share History

Next Fiscal Year Estimate $9.87
Dec2015 $1.77
Dec2014 $3.76
Dec2013 $8.39
Dec2012 $6.16
Dec2011 $3.69
Dec2010 $5.32
Dec2009 $4.60
Dec2008 $4.05
Dec2007 $3.84
Dec2006 $2.55
Dec2005 $3.12
Dec2004 $2.82
Dec2003 $1.60
Dec2002 $1.47
Dec2001 $1.38
Dec2000 $1.05
Dec1999 $1.14
Dec1998 $2.26
Dec1997 $0.63
Dec1996 $0.81

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $6.04
Dec2015 $4.34
Dec2014 $5.57
Dec2013 $6.19
Dec2012 $4.98
Dec2011 $4.36
Dec2010 $4.49
Dec2009 $3.93
Dec2008 $3.49
Dec2007 $3.07
Dec2006 $2.56
Dec2005 $2.40
Dec2004 $1.91
Dec2003 $1.42
Dec2002 $1.37
Dec2001 $1.31
Dec2000 $1.24

Recommended Reading:

Other ModernGraham posts about the company

C.R. Bard Inc. Valuation – November 2015 Update $BCR
C.R. Bard Inc. Analysis – August 2015 Update $BCR
The Best Companies of the Medical Industry – June 2015
47 Companies in the Spotlight This Week – 5/16/15

Other ModernGraham posts about related companies

Psychemedics Corp Stock Valuation – February 2016 $PMD
Edwards Lifesciences Corp Valuation – February 2016 $EW
Cerner Corporation Valuation – February 2016 Update $CERN
Henry Schein Inc Valuation – February 2016 Update $HSIC
Medtronic PLC Valuation – January 2016 Update $MDT
PerkinElmer Inc Valuation – January 2016 Update $PKI
Quest Diagnostics Inc Valuation – January 2016 Update $DGX
Dentsply International Inc Valuation – November 2015 Update $XRAY
UnitedHealth Group Inc. Valuation – November 2015 Update $UNH
DaVita HealthCare Partners Inc Valuation – November 2015 Update $DVA

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

C.R. Bard Inc. Valuation – November 2015 Update $BCR

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – October 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how C.R. Bard Inc. (BCR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): C. R. Bard, Inc. (Bard) and its subsidiaries are engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. . The Company reports its sales in four major product group categories: vascular, urology, oncology and surgical specialty. The Company also has a product group of other products. The Company’s vascular products cover a range of minimally invasive devices for the treatment of peripheral vascular disease and heart arrhythmias. Its urology products include basic urology drainage products, fecal and urinary continence products, urological specialty products and Targeted Temperature Management products. Its oncology products cover a range of devices used in the treatment and management of various cancers and other diseases and disorders. Its surgical specialty products include implanted patches and fixation devices for hernia and other soft tissue repairs, in addition to hemostats and surgical sealants.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of BCR – November 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $13,605,387,882 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.62 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 38.60% Pass
6. Moderate PEmg Ratio PEmg < 20 40.73 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 9.23 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.62 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.42 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

BCR value Chart November 2015

EPSmg $4.52
MG Growth Estimate 0.54%
MG Value $43.30
Opinion Overvalued
MG Value based on 3% Growth $65.56
MG Value based on 0% Growth $38.43
Market Implied Growth Rate 16.11%
Current Price $184.14
% of Intrinsic Value 425.27%

C.R. Bard Inc. qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the low current ratio and the high PEmg and PB ratios.  The Enterprising Investor is only initially concerned with the level of debt relative to the net current assets.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $4.36 in 2011 to an estimated $4.52 for 2015.  This level of demonstrated earnings growth does not support the market’s implied estimate of 16.11% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on C.R. Bard Inc. (BCR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

BCR Charts November 2015

Net Current Asset Value (NCAV) -$18.73
Graham Number $32.25
PEmg 40.73
Current Ratio 1.62
PB Ratio 9.23
Dividend Yield 0.49%
Number of Consecutive Years of Dividend Growth 20

 

[/level-mg-stocks-screens-subscriber]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Total Current Assets $2,106,100,000
Total Current Liabilities $1,299,500,000
Long-Term Debt $1,147,700,000
Total Assets $4,972,400,000
Intangible Assets $2,151,300,000
Total Liabilities $3,494,200,000
Shares Outstanding (Diluted Average) 74,100,000

Earnings Per Share History

Next Fiscal Year Estimate $2.32
Dec14 $3.76
Dec13 $8.39
Dec12 $6.16
Dec11 $3.69
Dec10 $5.32
Dec09 $4.60
Dec08 $4.05
Dec07 $3.84
Dec06 $2.55
Dec05 $3.12
Dec04 $2.82
Dec03 $1.60
Dec02 $1.47
Dec01 $1.38
Dec00 $1.05
Dec99 $1.14
Dec98 $2.26
Dec97 $0.63
Dec96 $0.81
Dec95 $0.77

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $4.52
Dec14 $5.57
Dec13 $6.19
Dec12 $4.98
Dec11 $4.36
Dec10 $4.49
Dec09 $3.93
Dec08 $3.49
Dec07 $3.07
Dec06 $2.56
Dec05 $2.40
Dec04 $1.91
Dec03 $1.42
Dec02 $1.37
Dec01 $1.31
Dec00 $1.24
Dec99 $1.27

Recommended Reading:

Other ModernGraham posts about the company

C.R. Bard Inc. Analysis – August 2015 Update $BCR
The Best Companies of the Medical Industry – June 2015
47 Companies in the Spotlight This Week – 5/16/15
C.R. Bard Inc. Quarterly Valuation – May 2015 $BCR
C.R. Bard Inc. Quarterly Valuation – January 2015 $BCR

Other ModernGraham posts about related companies

Henry Schein Inc. Valuation – October 2015 Update $HSIC
Medtronic PLC Valuation – October 2015 Update $MDT
PerkinElmer Inc. Analysis – October 2015 Update $PKI
Quest Diagnostics Inc. Analysis – October 2015 Update $DGX
Stryker Corporation Analysis – October 2015 Update $SYK
The Best Companies of the Medical Industry – September 2015
Zimmer Biomet Holdings Inc. Analysis – September 2015 Update $ZBH
Waters Corporation Analysis – September 2015 Update $WAT
Patterson Companies Inc. Analysis – September 2015 Update $PDCO
Edwards Lifesciences Corporation Analysis – September 2015 Update $EW

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

C.R. Bard Inc. Analysis – August 2015 Update $BCR

Bard_logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Most Undervalued Companies for the Defensive Investor – July 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how C.R. Bard Inc. (BCR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): C. R. Bard, Inc. (Bard) and its subsidiaries are engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. . The Company reports its sales in four major product group categories: vascular, urology, oncology and surgical specialty. The Company also has a product group of other products. The Company’s vascular products cover a range of minimally invasive devices for the treatment of peripheral vascular disease and heart arrhythmias. Its urology products include basic urology drainage products, fecal and urinary continence products, urological specialty products and Targeted Temperature Management products. Its oncology products cover a range of devices used in the treatment and management of various cancers and other diseases and disorders. Its surgical specialty products include implanted patches and fixation devices for hernia and other soft tissue repairs, in addition to hemostats and surgical sealants.

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Defensive Investor – must pass at least 6 of the following 7 tests: Score = 4/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion - PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 - FAIL
  3. Earnings Stability – positive earnings per share for at least 10 straight years -PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years - PASS
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period - PASS
  6. Moderate PEmg ratio – PEmg is less than 20 - FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 - FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 - PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 - PASS
  3. Earnings Stability – positive earnings per share for at least 5 years - PASS
  4. Dividend Record – currently pays a dividend - PASS
  5. Earnings growth – EPSmg greater than 5 years ago - PASS

Valuation Summary

Key Data:

Recent Price $198.57
MG Value $98.39
MG Opinion Overvalued
Value Based on 3% Growth $82.04
Value Based on 0% Growth $48.09
Market Implied Growth Rate 13.30%
Net Current Asset Value (NCAV) -$15.31
PEmg 35.10
Current Ratio 1.96
PB Ratio 8.88

Balance Sheet – June 2015

Current Assets $2,173,000,000
Current Liabilities $1,110,000,000
Total Debt $1,148,000,000
Total Assets $4,968,000,000
Intangible Assets $2,072,000,000
Total Liabilities $3,309,000,000
Outstanding Shares 74,200,000

Earnings Per Share

2015 (estimate) $5.73
2014 $3.76
2013 $8.39
2012 $6.16
2011 $3.69
2010 $5.32
2009 $4.60
2008 $4.05
2007 $3.84
2006 $2.55
2005 $3.12

Earnings Per Share – ModernGraham

2015 (estimate) $5.66
2014 $5.57
2013 $6.19
2012 $4.98
2011 $4.36
2010 $4.49

Dividend History

Free Cash Flow

Conclusion:

C.R. Bard Inc. qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the low current ratio and the high PEmg and PB ratios.  The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with the evaluation.

As for a valuation, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $4.36 in 2011 to an estimated $5.66 for 2015.  This level of demonstrated earnings growth does not support the market’s implied estimate of 13.3% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on C.R. Bard Inc. (BCR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

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C.R. Bard Inc. Quarterly Valuation – May 2015 $BCR

Bard_logoC.R. Bard Inc. (BCR) should attract all Enterprising Investors, particularly due to the company’s stable dividend growth over the last few years. That said, Benjamin Graham, the father of value investing, taught that the most important aspect to consider is whether the company is trading at a discount relative to its intrinsic value. It is through a thorough fundamental analysis that the investor is able to determine a potential investment’s merits. Here’s an updated look at how C.R. Bard Inc. fares in the ModernGraham valuation model.

This model is inspired by the teachings of Benjamin Graham, and considers numerous metrics intended to help the investor reduce risk levels. The first part of the analysis is to determine whether the company is suitable for the very conservative Defensive Investor or the less conservative Enterprising Investor, who is willing to spend a greater amount of time conducting further research.

In addition, Graham strongly suggested that investors avoid speculation, in order to remove the subjective elements of emotion. This is best achieved by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another. By using the ModernGraham method, one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.

BCR Chart

BCR data by YCharts

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To read the rest of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.
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Defensive Investor – Must pass at least 6 of the following 7 tests: Score = 5/7

  1. Adequate Size of Enterprise – Market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – Current ratio greater than 2 – PASS
  3. Earnings Stability – Positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – Has paid a dividend for at least 10 straight years – PASS
  5. Earnings Growth – Earnings per share has increased by at least one-third over the last 10 years, using three-year averages at the beginning and end of the period – PASS
  6. Moderate PEmg (price over normalized earnings) ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – Must pass at least 4 of the following 5 tests, or be suitable for a Defensive Investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – Current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt-to-Net Current Assets ratio less than 1.1 – PASS
  3. Earnings Stability – Positive earnings per share for at least 5 years – PASS
  4. Dividend Record – Currently pays a dividend – PASS
  5. Earnings Growth – EPSmg greater than that 5 years ago – PASS

Valuation Summary

Key Data

Recent Price $169.99
MG Value $167.43
MG Opinion Fairly Valued
Value Based on 3% Growth $97.75
Value Based on 0% Growth $57.30
Market Implied Growth Rate 8.36%
Net Current Asset Value (NCAV) -$16.77
PEmg 25.22
Current Ratio 2.26
PB Ratio 7.37

Balance Sheet – March 2015

Current Assets $2,037,000,000
Current Liabilities $903,000,000
Total Debt $1,147,000,000
Total Assets $5,057,000,000
Intangible Assets $2,103,000,000
Total Liabilities $3,308,000,000
Outstanding Shares 75,800,000

Earnings Per Share

2015 (estimate) $8.98
2014 $3.76
2013 $8.39
2012 $6.16
2011 $3.69
2010 $5.32
2009 $4.60
2008 $4.05
2007 $3.84
2006 $2.55
2005 $3.12

Earnings Per Share – ModernGraham

2015 (estimate) $6.74
2014 $5.57
2013 $6.19
2012 $4.98
2011 $4.36
2010 $4.49

Dividend History

BCR Dividend Chart

BCR Dividend data by YCharts

Conclusion

C.R. Bard Inc. should satisfy the Enterprising Investor, but not the Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios, while the Enterprising Investor has no initial concerns. Therefore, Enterprising Investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company’s intrinsic value.

From a valuation side of things, the company has grown its EPSmg (normalized earnings) from $4.36 in 2011 to an estimated $6.74 for 2015. This level of demonstrated growth is in line with the market’s implied estimate for earnings growth of 8.36% over the next 7-10 years. The ModernGraham valuation model, therefore, returns an estimate of intrinsic value falling within a margin of safety relative to the current price, indicating C.R. Bard Inc. is fairly valued at the present time.

Disclaimer: The author did not hold a position in any of the companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours. Logos taken from either the company website or Wikipedia; this article is not affiliated with the companies in any manner.

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C.R. Bard Inc. Quarterly Valuation – January 2015 $BCR

Bard_logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Most Undervalued Companies for the Defensive Investor – December 2014.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how C.R. Bard Inc. (BCR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): C. R. Bard, Inc. (Bard) is engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. As of December 31, 2011, the Company sold a range of products to hospitals, individual healthcare professionals, extended care facilities and alternate site facilities on a global basis. The Company participates in the markets for vascular, urology, oncology and surgical specialty products. Bard also has a product group of other products. Through subsidiaries and a joint venture, Bard markets its products to customers in over 100 countries outside the United States. The Company’s principal international markets were in Europe and Japan as of December 31, 2011. On November 10, 2011, Bard acquired Medivance, Inc. On December 16, 2011, the Company acquired Lutonix, Inc.

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 5/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion - PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 - PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years - PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years - PASS
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period - PASS
  6. Moderate PEmg ratio – PEmg is less than 20 - FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 - FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 - PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 - PASS
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend - PASS
  5. Earnings growth – EPSmg greater than 5 years ago - PASS

Valuation Summary

Key Data:

Recent Price $178.20
MG Value $183.48
MG Opinion Fairly Valued
Value Based on 3% Growth $102.84
Value Based on 0% Growth $60.29
Market Implied Growth Rate 8.31%
Net Current Asset Value (NCAV) -$16.40
PEmg 25.12
Current Ratio 3.15
PB Ratio 7.42

Balance Sheet – September 2014

Current Assets $2,031,000,000
Current Liabilities $645,000,000
Total Debt $1,403,000,000
Total Assets $5,114,000,000
Intangible Assets $2,184,000,000
Total Liabilities $3,282,000,000
Outstanding Shares 76,300,000

Earnings Per Share

2014 (estimate) $8.33
2013 $8.39
2012 $6.16
2011 $3.69
2010 $5.32
2009 $4.60
2008 $4.05
2007 $3.84
2006 $2.55
2005 $3.12
2004 $2.82

Earnings Per Share – ModernGraham

2014 (estimate) $7.09
2013 $6.19
2012 $4.98
2011 $4.36
2010 $4.49
2009 $3.93

Dividend History

Conclusion:

C.R. Bard Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the high PEmg and PB ratios. Meanwhile the Enterprising Investor has no initial concerns with the company.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel very comfortable proceeding with further research and comparing the company to other opportunities.  As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $4.49 in 2010 to an estimated $7.09 for 2014.  This level of demonstrated growth supports the market’s implied estimate of 8.31% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value within a margin of safety relative to the price.

Be sure to check out previous ModernGraham valuations of C.R. Bard Inc. (BCR) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on C.R. Bard Inc. (BCR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in C.R. Bard Inc. (BCR) or in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

C.R. Bard Inc. Quarterly Stock Valuation – October 2014 $BCR

Bard_logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Highest Dividend Yields Among Undervalued Companies for the Defensive Investor – September 2014.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how C.R. Bard Inc. (BCR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): C. R. Bard, Inc. (Bard) is engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. As of December 31, 2011, the Company sold a range of products to hospitals, individual healthcare professionals, extended care facilities and alternate site facilities on a global basis. The Company participates in the markets for vascular, urology, oncology and surgical specialty products. Bard also has a product group of other products. Through subsidiaries and a joint venture, Bard markets its products to customers in over 100 countries outside the United States. The Company’s principal international markets were in Europe and Japan as of December 31, 2011. On November 10, 2011, Bard acquired Medivance, Inc. On December 16, 2011, the Company acquired Lutonix, Inc.
BCR Chart

BCR data by YCharts

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 5/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion - PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 - PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years - PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years - PASS
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period - PASS
  6. Moderate PEmg ratio – PEmg is less than 20 - FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 - FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 4/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 - PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 - FAIL
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago - PASS

Valuation Summary

Key Data:

Recent Price $146.26
MG Value $186.21
MG Opinion Fairly Valued
Value Based on 3% Growth $103.91
Value Based on 0% Growth $60.91
Market Implied Growth Rate 5.96%
Net Current Asset Value (NCAV) -$18.97
PEmg 20.41
Current Ratio 2.59
PB Ratio 6.50

Balance Sheet – 6/30/2014

Current Assets $2,025,800,000
Current Liabilities $782,000,000
Total Debt $1,404,100,000
Total Assets $5,118,300,000
Intangible Assets $2,213,600,000
Total Liabilities $3,440,900,000
Outstanding Shares 74,600,000

Earnings Per Share

2014 (estimate) $8.31
2013 $8.55
2012 $6.28
2011 $3.76
2010 $5.38
2009 $4.65
2008 $4.06
2007 $3.84
2006 $2.55
2005 $3.12
2004 $2.82

Earnings Per Share – ModernGraham

2014 (estimate) $7.17
2013 $6.30
2012 $5.06
2011 $4.42
2010 $4.53
2009 $3.95

Dividend History
BCR Dividend Chart

BCR Dividend data by YCharts

Conclusion:

C.R. Bard Inc. qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned with the high PEmg and PB ratios.  The Enterprising Investor’s only initial concern is the high level of debt relative to the net current assets.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with research into the company and comparing it to other opportunities. From a valuation side of things, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $4.53 in 2010 to an estimated $7.17 for 2014.  This level of demonstrated growth supports the market’s implied estimate of 5.96% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value within a margin of safety relative to the price.

Be sure to check out the previous ModernGraham valuations of C.R. Bard Inc. (BCR) for more perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on C.R. Bard Inc. (BCR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in C.R. Bard Inc. (BCR) or in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

C.R. Bard Inc. Quarterly Valuation – July 2014 $BCR

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Highest Dividend Yields Among Undervalued Companies for the Enterprising Investor.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how C.R. Bard Inc. (BCR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): C. R. Bard, Inc. (Bard) is engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. As of December 31, 2011, the Company sold a range of products to hospitals, individual healthcare professionals, extended care facilities and alternate site facilities on a global basis. The Company participates in the markets for vascular, urology, oncology and surgical specialty products. Bard also has a product group of other products. Through subsidiaries and a joint venture, Bard markets its products to customers in over 100 countries outside the United States. The Company’s principal international markets were in Europe and Japan as of December 31, 2011. On November 10, 2011, Bard acquired Medivance, Inc. On December 16, 2011, the Company acquired Lutonix, Inc. BCR Chart

BCR data by YCharts

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 5/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 - PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years - PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years - PASS
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period - PASS
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – PASS
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend - PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $143.77
MG Value $183.52
MG Opinion Fairly Valued
Value Based on 3% Growth $103.38
Value Based on 0% Growth $60.60
Market Implied Growth Rate 5.83%
Net Current Asset Value (NCAV) -$11.55
PEmg 20.17
Current Ratio 3.65
PB Ratio 5.33

Balance Sheet – 3/31/2014

Current Assets $1,941,200,000
Current Liabilities $531,700,000
Total Debt $1,404,800,000
Total Assets $4,877,900,000
Intangible Assets $2,240,700,000
Total Liabilities $2,821,700,000
Outstanding Shares 76,260,000

Earnings Per Share

2014 (estimate) $8.20
2013 $8.55
2012 $6.28
2011 $3.76
2010 $5.38
2009 $4.65
2008 $4.06
2007 $3.84
2006 $2.55
2005 $3.12
2004 $2.82

Earnings Per Share – ModernGraham

2014 (estimate) $7.13
2013 $6.30
2012 $5.06
2011 $4.42
2010 $4.53
2009 $3.95


Dividend History
BCR Dividend Chart

BCR Dividend data by YCharts

Conclusion:

C.R. Bard qualifies for the Enterprising Investor but not the Defensive Investor. The Defensive Investor has concerns with the high PEmg and PB ratios, but the company passes all of the Enterprising Investor’s requirements. As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities. As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $4.53 in 2010 to an estimated $7.13 in 2014. This level of demonstrated growth supports the market’s implied estimate of 5.83% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value within a margin of safety relative to the price.

Be sure to check out the previous ModernGraham valuations of C.R. Bard (BCR) for more perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on C.R. Bard (BCR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in C.R. Bard (BCR) or in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

C.R. Bard Inc. (BCR) Quarterly Valuation – March 2014

Bard_logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how C.R. Bard Inc. fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): C. R. Bard, Inc. (Bard) is engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. As of December 31, 2011, the Company sold a range of products to hospitals, individual healthcare professionals, extended care facilities and alternate site facilities on a global basis. The Company participates in the markets for vascular, urology, oncology and surgical specialty products. Bard also has a product group of other products. Through subsidiaries and a joint venture, Bard markets its products to customers in over 100 countries outside the United States. The Company’s principal international markets were in Europe and Japan as of December 31, 2011. On November 10, 2011, Bard acquired Medivance, Inc. On December 16, 2011, the Company acquired Lutonix, Inc.

BCR Chart

BCR data by YCharts

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 5/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL


Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – PASS
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $146.69
MG Value $166.39
MG Opinion Fairly Valued
Value Based on 3% Growth $91.41
Value Based on 0% Growth $53.58
Market Implied Growth Rate 7.38%
Net Current Asset Value (NCAV) -$11.14
PEmg 23.27
Current Ratio 3.56
PB Ratio 5.44

Balance Sheet – 12/31/2013

Current Assets $2,090,400,000
Current Liabilities $586,500,000
Total Debt $1,405,700,000
Total Assets $5,041,100,000
Intangible Assets $2,264,400,000
Total Liabilities $2,952,900,000
Outstanding Shares 77,440,000

Earnings Per Share

2013 $8.55
2012 $6.28
2011 $3.76
2010 $5.38
2009 $4.65
2008 $4.06
2007 $3.84
2006 $2.55
2005 $3.12
2004 $2.82


Earnings Per Share – ModernGraham

2013 $6.30
2012 $5.06
2011 $4.42
2010 $4.53
2009 $3.95
2008 $3.49

Dividend History

BCR Dividend Chart

BCR Dividend data by YCharts

Conclusion:

C.R. Bard Inc. is a very intriguing company for Enterprising Investors, having passed all five of the investor type’s requirements.  The company does not quite qualify for the Defensive Investor due to the high PEmg and PB ratios.  As a result, Enterprising Investors should feel very comfortable proceeding with further research into the company but should also compare it to other opportunities through a review of ModernGraham’s valuation of Medtronic (MDT) and ModernGraham’s valuation of Covidien (COV).  From a valuation perspective, the company appears to be fairly valued, having exhibited solid growth in EPSmg (normalized earnings) from $3.95 in 2009 to $6.30 in 2013.  This demonstrated level of growth supports the market’s implied estimate of 7.38% earnings growth and leads the ModernGraham valuation model to estimate an intrinsic value within a margin of safety relative to the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on C.R. Bard Inc. (BCR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

If you like our valuations, why not check out ModernGraham Stocks & Screens?  It’s a great way to review the valuations while screening for things like low PE ratio, undervalued companies, etc.!

Disclaimer:  The author did not hold a position in C.R. Bard Inc. (BCR) or any of the other companies mentioned in the article at the time of publication and had no intention of changing that position within the next 72 hours.

Logo taken from wikipedia; this article is not affiliated with the company in any manner.

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