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What gives with my Becton, Dickinson and Co. shares?

The world’s largest manufacturer and distributor of surgical products makes health care staples.

Products include needles, syringes and disposal units. It also makes diagnostic instruments and systems used to study cells.

Net income for its fiscal fourth quarter, ended Sept. 30, rose 9 percent.
It derives more than half of its profits from overseas sales, which can also be a problem. The stronger U.S. dollar is expected to weigh on its results, which means the firm must improve its operating margins to offset that drag.

Oil prices have fallen, but the price of oil-based resins used to make syringes, plastic dishes and other items remains a variable. In the past, it has had some difficulty passing along price increases.

Shares are down 18 percent this year following last year’s 19 percent increase and a 17 percent increase in 2006. The company has a healthy balance sheet with lots of cash, which it uses regularly to raise its dividend, repurchase shares, finance acquisitions and make capital expenditures.

Becton Dickinson underwent several changes at the top recently that are not expected to alter its direction. The consensus rating among Wall Street analysts is between "buy" and "hold," according to Thomson Financial. It consists of three "strong buys," two "buys" and five "holds."

The medical field has its risks. For example, the company was less than successful in its blood glucose monitor business and exited it. It is also a defendant in several class-action cases related to injuries incurred while using its products.

Earnings are expected to increase 9 percent in the fiscal year ending in September 2009 and 11 percent the following fiscal year payday loans. The forecast of five-year annualized growth rate is 13 percent, versus 14 percent expected for the medical instruments and supplies industry.

What are the tax rules for giving gifts of cash and stock? I would like to give gifts to both of my grandchildren, but I would like to avoid paying taxes on this.

If you give any one person gifts whose value exceeds $12,000 this year, you must report the total gifts to the IRS and may have to pay gift tax.

"You have to file the gift tax return, with the amount of the gift that is in excess of $12,000 per person deducted from your lifetime gift exemption," said Molly Balunek, certified financial planner and vice president with Spero-Smith Investment Advisers in Cleveland. "The exemption is currently $1 million."

The recipient of the gifts does not have to report them or pay income tax on them.

"The gift value for stock is based on the current market value," Balunek said.

Excluded from gift tax are gifts to a spouse, a political organization, medical expenses and educational expenses. But because of the intricacies of gift tax rules, it makes sense to consult a tax adviser or the IRS if you have given gifts in excess of $12,000 this year.

andrewinv@aol.com

2008, TRIBUNE MEDIA SERVICES INC.

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