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