While politicians debate the future of the nation’s health-care system, one fund manager says there is no debating the growth potential of large-cap, medical technology firm Becton, Dickinson and Company (BDX).

“Even if we go to a national health -are system as is one of our choices, that would probably just expand the use of the company’s equipment,” said Robert Loest, senior portfolio manager for the Minot, ND-based Integrity Growth and Income Fund (IGIAX).

Becton Dickinson manufactures and sells medical devices, supplies and diagnostic equipment and is divided into three divisions: BD Medical, which manufactures basic medical equipment, such as needles and scalpels; BD Diagnostics, which creates the products that aid in the collection and transport of diagnostic specimens like blood samples used in testing; and BD Biosciences, the company's medical research and technology products division.

Loest said because the company not only makes the equipment, but also supplies the consumable reagents, it has a very stable business model.

“They make the majority of their profit just selling the supplies on whatever research is being done,” Loest said. “So you’ve got enormously stable income and free cash flow from these reagents.”

That stability has kept Becton Dickinson in the Integrity Growth and Income Fund since the mid-1990s, Loest said. The fund, which launched in 1995, has about $26 million in assets under management, and Loest invests primarily in domestic companies where he can generate the highest return possible, while taking on the least amount of risk.

The valuation metrics Loest uses, which he claims to be fairly stringent or “Draconian,” show Becton Dickinson as being about 33% undervalued. Loest said he won’t sell the stock until it hits fair value, which he deems to be about $106 a share.

Loest also likes the fact that since the rally beginning in March, the stock is only up about 17%.

“This company and a lot of other safe companies like Johnson & Johnson haven’t gotten carried away by this bear market rally,” Loest said.

Loest thinks both Johnson & Johnson (JNJ) and Waters Corporation (WAT), which could be considered competitors of Becton Dickinson, are safe bets as well, but he likes Becton Dickinson because the stock has been less volatile.

Although there are currently about 25 to 30 holdings reflected in the fund’s portfolio, Loest said Becton Dickinson is its second-largest holding. Since the fund is interested in socially responsible investing, Becton Dickinson also had to meet criteria demonstrating it was environmentally and socially responsible.

“I always get suspicious when I can’t find a major negative with a company, but I’m really having a hard time finding any real negatives with Becton Dickinson,” Loest said.