Medtronic Had A Great Year; How Good The Next?

This week I'm seeking a prestigious and long-term dividend-paying stock from the healthcare business sector. 

That healthcare sector includes ten industries all related to testing, diagnosing and treating what ails us. Healthcare industries are: biotechnology; diagnostics & research; drug manufacturers - major and - specialty & generic; healthcare plans; long-term care facilities; medical care; medical devices; medical distribution; medical supplies.

Today I'm reviewing a large-cap medical devices firm, named Medtronic PLC. Its trading ticker symbol is MDT

Medtronic PLC is a medical technology company. It is primarily manufactures and sells device-based medical therapies. It operates in Cardiac and Vascular, Minimally Invasive Therapies, Restorative Therapies and Diabetes segments.

The Cardiac and Vascular Group segment offers implantable cardiac pacemakers, cardioverter defibrillators, and cardiac resynchronization therapy devices. 

The Minimally Invasive Therapies Group segment offers surgical products, including surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products.

The Restorative Therapies Group segment offers products for spinal surgeons, neurosurgeons, neurologists, pain management and other specialists.

The Diabetes Group segment offers insulin pumps and consumables, continuous glucose monitoring systems, and therapy management software.

The company was founded in 1949 in Minneapolis , Minnesota and is now headquartered in Dublin, Ireland.

I use three key data points to gauge the value of any dividend equity or fund like  Medtronic PLC. (MDT): 

(1) Price

(2) Dividends

(3) Returns

Besides those three, four more keys will finally unlock an equity or fund in which to invest.

But those first three primary keys, best tell whether a company has made, is making, and will make money. 

MDT Price

Medtonic's price per share was $94.69 at Friday's market close. A year ago its price was $78.07 for a price gain of $16.62 per share for the year.  

Assuming Medtonic's price will trade in the range of $80 to $120 next year, Medtonic's recent $94.69 price could manage a $16.00 gain and grow to $110.69 by early-October, 2019. 

MDT Dividends

Axis's most recent quarterly dividend was $0.50 declared August 24th and payable October 19th. 

At this most recent $0.50 quarterly rate, Medtonic's annual dividend equals $2.00 yielding 2.11% at yesterday's closing $94.69 price.

Gains For MDT?

Adding the $2.00 estimated annual dividend to my estimated $16.00 annual price upside for Medtronic (MDT) makes an $18.00  potential gross annual per share gain, which will be reduced by the costs to trade the shares.  

 A little over $1,000.00 invested today at the $94.69 recent price buys 11 Medtronic PLC. (MDT) shares. 

A $10 broker fee paid half at purchase and half at sale costs $0.91 per share, subtracting that $0.91 brokerage cost from the estimated $18 gross annual gain leaves a net gain of $17.09 X 11 shares = $187.99 or an 18% net gain on a $1,041.59 investment.

Therefore, Medtronic PLC, whose trading ticker symbol is MDT, now shows a possible 18% net gain including an 2.11% dividend yield. 

Twenty-five brokers cover this stock:

Nine brokers say MDT is a "buy".

Four brokers say MDT will "outperform" its peers

The other twelve brokers say MDT's a "hold"

Thus, the consensus recommendation number available is 2.12, or 'Outperform

The median price target set by the twenty-five brokers is $6.42 under my estimated $110.69 one year target.

So, you could look at these few speculative numbers this way, Medtronic PLC has made money, is making money, and could net a 10% to 18% net annual gain including a 2.11% dividend yield. It could be more, it could be less. 

The above speculation is based on past year performance. Actual results remain to be seen. Those results will determine if Medtronic PLC. (MDT) is worth your time and money.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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