I’m a Medtronic fan for the long-term and I didn’t notice they got cheap again.
Sales are climbing, EPS is steady from last year (but nice) and share count is down (they buy back consistently). Let’s see what Boaty thinks:
🛳️ Medtronic at these levels fits exactly your “long‑term, boring‑good” bucket; the business is doing fine, guidance is intact, and the stock has quietly gotten reasonable again.
Where the business is now
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- Q2 and Q3 FY26 were solid “steady compounder” quarters: revenue around $9B per quarter, +6–6.6% reported, ~5.5–6% organic growth.
- Management raised and then reiterated FY26 guidance:
- ~5.5% organic revenue growth.
- Non‑GAAP EPS $5.62–$5.66 for FY26, even after a roughly $185M tariff hit baked in.
- Segment picture:
- Cardiovascular growing ~11% with strong U.S. momentum; Cardiac Ablation up 80% YoY, driven by pulsed field ablation ramp.
- Neuroscience slower (~3% growth) but expected to benefit from pipeline activations (Stealth AXiS, etc.) into FY27.
So you’re looking at a 5–6% topline grower with high‑single‑digit EPS growth guided for FY27.
Valuation and dividend
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- Stock around $76; trailing EPS about $3.59, forward EPS $5.62–5.66 with next year expected near $6.09.
- On FY26 numbers you’re paying roughly 13–14x forward earnings, with next year’s implied growth ~9%.
- Dividend is $2.84/year (0.71 quarterly), a ~3.7% yield at current price, with a 49‑year increase streak and ~5.3% 5‑year dividend growth.
- Payout is high vs trailing GAAP (~79%) but much safer vs forward non‑GAAP and cash flow (about 51% this year, ~47% next, ~37% of FCF).
In other words: at mid‑70s you’re getting a near‑4% yield from a 5–6% organic grower with a credible pipeline and long dividend history. That’s about as “Phil‑style” a long‑term hold as you’ll find in med‑tech.
I still like MDT here.
