Medtronic Offers Strong Share Price, Dividend Growth

By
A A A

It's hard to beatMedtronic ( MDT ) for steady share price action, earnings and dividend growth lately.

Shares of the world's biggest maker of medical devices have risen 27% this year, easily beating the S&P 500. They're up 38% from a year ago and 73% from a bottom of 30.18 in August 2011.

The stock is 10% past a 47.50 buy point from a flat base, putting it well out of buying range. A test of the 10-week line could provide a follow-on buying opportunity.

The Minneapolis-based company announced June 20 that it was increasing its quarterly dividend by 8% to 28 cents a share for shareholders of record on July 5. That brings the annual dividend to $1.12 per share, good for an annual yield of 2.2%, just below the 2.5% average for the S&P 500.

The company is "committed to returning 50% of free cash flow to shareholders each year through dividends and share repurchases, which still gives us ample flexibility to make necessary investments for sustainable growth," CEO Omar Ishrak said at the time.

Medtronic has boosted the payout for 36 years in a row, making it a member of the S&P 500 Dividend Aristocrats index. It's nearly quadrupled in the past decade.

The stock jumped May 21 after the company posted a better-than-expected 11% increase in profit for its fiscal fourth quarter. The 4% increase in sales also topped views.

Medtronic boasts a three-year Earnings Stability Factor of 1 on a scale of 0 to 99, with 0 being most stable. Its annual profit grew through the 2008-09 recession.

Medtronic earns 45% of its revenue outside the U.S., which makes it vulnerable to currency swings. It recently bought KangHui, a Chinese maker of orthopedic implants, to expand into China's fast-growing medical device market.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas

Referenced Stocks: MDT

Investor's Business Daily

Investor's Business Daily

More from Investor's Business Daily:

Related Videos

Can You Talk Sexy Money?
Can You Talk Sexy Money?            

Stocks

Referenced

75%

Most Active by Volume

28,112,150
  • $16.8499 ▲ 0.18%
22,698,234
  • $3.34 ▼ 2.34%
21,764,781
  • $4.935 ▲ 2.60%
14,912,457
  • $96.55 ▼ 0.68%
14,164,912
  • $98.516 ▼ 0.67%
13,769,439
  • $6.46 ▼ 1.60%
13,055,005
  • $14.56 ▼ 0.21%
12,591,512
  • $76.16 ▼ 0.51%
As of 10/2/2014, 11:03 AM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com