MEDTRONIC PLC (MDT) Stock Fundamental Analysis
NYSE:MDT - New York Stock Exchange, Inc. - IE00BTN1Y115 - Common Stock - Currency: USD
Taking everything into account, MDT scores 6 out of 10 in our fundamental rating. MDT was compared to 188 industry peers in the Health Care Equipment & Supplies industry. MDT scores excellent on profitability, but there are some minor concerns on its financial health. MDT has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
MDT had positive earnings in the past year.
In the past year MDT had a positive cash flow from operations.
In the past 5 years MDT has always been profitable.
MDT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of MDT (4.73%) is better than 82.80% of its industry peers.
MDT's Return On Equity of 8.63% is amongst the best of the industry. MDT outperforms 83.33% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.09%, MDT belongs to the top of the industry, outperforming 80.65% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MDT is in line with the industry average of 7.84%.
The 3 year average ROIC (5.95%) for MDT is below the current ROIC(6.09%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.73% | ||
| ROE | 8.63% | ||
| ROIC | 6.09% |
ROA(3y)4.59%
ROA(5y)4.58%
ROE(3y)8.07%
ROE(5y)8.13%
ROIC(3y)5.95%
ROIC(5y)5.53%
1.3 Margins
With an excellent Profit Margin value of 12.83%, MDT belongs to the best of the industry, outperforming 89.78% of the companies in the same industry.
In the last couple of years the Profit Margin of MDT has declined.
With an excellent Operating Margin value of 19.47%, MDT belongs to the best of the industry, outperforming 91.94% of the companies in the same industry.
MDT's Operating Margin has declined in the last couple of years.
MDT has a Gross Margin of 65.59%. This is in the better half of the industry: MDT outperforms 68.28% of its industry peers.
MDT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.47% | ||
| PM (TTM) | 12.83% | ||
| GM | 65.59% |
OM growth 3Y1.83%
OM growth 5Y-3.49%
PM growth 3Y-1.74%
PM growth 5Y-5.6%
GM growth 3Y0.06%
GM growth 5Y-1.35%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), MDT is destroying value.
The number of shares outstanding for MDT has been reduced compared to 1 year ago.
Compared to 5 years ago, MDT has less shares outstanding
Compared to 1 year ago, MDT has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.98 indicates that MDT is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.98, MDT is doing good in the industry, outperforming 68.28% of the companies in the same industry.
The Debt to FCF ratio of MDT is 4.87, which is a neutral value as it means it would take MDT, 4.87 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.87, MDT is in the better half of the industry, outperforming 79.03% of the companies in the same industry.
A Debt/Equity ratio of 0.49 indicates that MDT is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.49, MDT is not doing good in the industry: 60.75% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 4.87 | ||
| Altman-Z | 2.98 |
ROIC/WACC0.93
WACC6.57%
2.3 Liquidity
MDT has a Current Ratio of 1.90. This is a normal value and indicates that MDT is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.90, MDT is not doing good in the industry: 70.97% of the companies in the same industry are doing better.
MDT has a Quick Ratio of 1.43. This is a normal value and indicates that MDT is financially healthy and should not expect problems in meeting its short term obligations.
MDT has a worse Quick ratio (1.43) than 64.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.9 | ||
| Quick Ratio | 1.43 |
3. Growth
3.1 Past
MDT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.38%.
MDT shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -0.04% yearly.
Looking at the last year, MDT shows a small growth in Revenue. The Revenue has grown by 2.72% in the last year.
MDT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.16% yearly.
EPS 1Y (TTM)0.38%
EPS 3Y5.55%
EPS 5Y-0.04%
EPS Q2Q%6.92%
Revenue 1Y (TTM)2.72%
Revenue growth 3Y2.43%
Revenue growth 5Y1.16%
Sales Q2Q%2.51%
3.2 Future
Based on estimates for the next years, MDT will show a small growth in Earnings Per Share. The EPS will grow by 6.74% on average per year.
MDT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.82% yearly.
EPS Next Y5.72%
EPS Next 2Y6.4%
EPS Next 3Y6.82%
EPS Next 5Y6.74%
Revenue Next Year4.06%
Revenue Next 2Y4.39%
Revenue Next 3Y4.61%
Revenue Next 5Y4.82%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 17.66, the valuation of MDT can be described as rather expensive.
Based on the Price/Earnings ratio, MDT is valued cheaply inside the industry as 87.63% of the companies are valued more expensively.
MDT is valuated rather cheaply when we compare the Price/Earnings ratio to 29.98, which is the current average of the S&P500 Index.
MDT is valuated correctly with a Price/Forward Earnings ratio of 15.99.
87.63% of the companies in the same industry are more expensive than MDT, based on the Price/Forward Earnings ratio.
MDT's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.66.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.66 | ||
| Fwd PE | 15.99 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MDT is valued cheaper than 84.95% of the companies in the same industry.
MDT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. MDT is cheaper than 87.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.12 | ||
| EV/EBITDA | 14.22 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MDT does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of MDT may justify a higher PE ratio.
PEG (NY)3.09
PEG (5Y)N/A
EPS Next 2Y6.4%
EPS Next 3Y6.82%
5. Dividend
5.1 Amount
MDT has a Yearly Dividend Yield of 3.09%.
Compared to an average industry Dividend Yield of 1.67, MDT pays a better dividend. On top of this MDT pays more dividend than 98.39% of the companies listed in the same industry.
MDT's Dividend Yield is a higher than the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.09% |
5.2 History
On average, the dividend of MDT grows each year by 6.78%, which is quite nice.
MDT has been paying a dividend for at least 10 years, so it has a reliable track record.
MDT has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.78%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
MDT pays out 84.62% of its income as dividend. This is not a sustainable payout ratio.
MDT's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP84.62%
EPS Next 2Y6.4%
EPS Next 3Y6.82%
94.3
+2.28 (+2.48%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners85.71%
Inst Owner Change1.98%
Ins Owners0.24%
Ins Owner Change0.1%
Market Cap120.92B
Analysts70.81
Price Target96.45 (2.28%)
Short Float %1.09%
Short Ratio2.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.09% |
Yearly Dividend2.77
Dividend Growth(5Y)6.78%
DP84.62%
Div Incr Years10
Div Non Decr Years10
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.56%
Min EPS beat(2)-0.08%
Max EPS beat(2)1.21%
EPS beat(4)2
Avg EPS beat(4)0.62%
Min EPS beat(4)-0.31%
Max EPS beat(4)1.65%
EPS beat(8)5
Avg EPS beat(8)2.04%
EPS beat(12)7
Avg EPS beat(12)1.23%
EPS beat(16)10
Avg EPS beat(16)1.6%
Revenue beat(2)1
Avg Revenue beat(2)-0.4%
Min Revenue beat(2)-1.38%
Max Revenue beat(2)0.59%
Revenue beat(4)3
Avg Revenue beat(4)0.1%
Min Revenue beat(4)-1.38%
Max Revenue beat(4)0.8%
Revenue beat(8)6
Avg Revenue beat(8)0.54%
Revenue beat(12)8
Avg Revenue beat(12)-0.03%
Revenue beat(16)9
Avg Revenue beat(16)-0.32%
PT rev (1m)0%
PT rev (3m)-1.16%
EPS NQ rev (1m)-1.79%
EPS NQ rev (3m)-1.9%
EPS NY rev (1m)0.04%
EPS NY rev (3m)0.01%
Revenue NQ rev (1m)-0.53%
Revenue NQ rev (3m)-0.6%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.66 | ||
| Fwd PE | 15.99 | ||
| P/S | 3.64 | ||
| P/FCF | 22.12 | ||
| P/OCF | 16.58 | ||
| P/B | 2.45 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.22 |
EPS(TTM)5.34
EY5.66%
EPS(NY)5.9
Fwd EY6.25%
FCF(TTM)4.26
FCFY4.52%
OCF(TTM)5.69
OCFY6.03%
SpS25.89
BVpS38.51
TBVpS-2.82
PEG (NY)3.09
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.73% | ||
| ROE | 8.63% | ||
| ROCE | 8.27% | ||
| ROIC | 6.09% | ||
| ROICexc | 6.77% | ||
| ROICexgc | 27.64% | ||
| OM | 19.47% | ||
| PM (TTM) | 12.83% | ||
| GM | 65.59% | ||
| FCFM | 16.46% |
ROA(3y)4.59%
ROA(5y)4.58%
ROE(3y)8.07%
ROE(5y)8.13%
ROIC(3y)5.95%
ROIC(5y)5.53%
ROICexc(3y)6.7%
ROICexc(5y)6.28%
ROICexgc(3y)31.86%
ROICexgc(5y)32.58%
ROCE(3y)8.09%
ROCE(5y)7.51%
ROICexcg growth 3Y-2.06%
ROICexcg growth 5Y-10.72%
ROICexc growth 3Y5.54%
ROICexc growth 5Y-2.32%
OM growth 3Y1.83%
OM growth 5Y-3.49%
PM growth 3Y-1.74%
PM growth 5Y-5.6%
GM growth 3Y0.06%
GM growth 5Y-1.35%
F-Score6
Asset Turnover0.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 4.87 | ||
| Debt/EBITDA | 2.62 | ||
| Cap/Depr | 68.26% | ||
| Cap/Sales | 5.5% | ||
| Interest Coverage | 7.84 | ||
| Cash Conversion | 79.78% | ||
| Profit Quality | 128.31% | ||
| Current Ratio | 1.9 | ||
| Quick Ratio | 1.43 | ||
| Altman-Z | 2.98 |
F-Score6
WACC6.57%
ROIC/WACC0.93
Cap/Depr(3y)54.86%
Cap/Depr(5y)52.06%
Cap/Sales(3y)4.63%
Cap/Sales(5y)4.52%
Profit Quality(3y)127.33%
Profit Quality(5y)128.64%
High Growth Momentum
Growth
EPS 1Y (TTM)0.38%
EPS 3Y5.55%
EPS 5Y-0.04%
EPS Q2Q%6.92%
EPS Next Y5.72%
EPS Next 2Y6.4%
EPS Next 3Y6.82%
EPS Next 5Y6.74%
Revenue 1Y (TTM)2.72%
Revenue growth 3Y2.43%
Revenue growth 5Y1.16%
Sales Q2Q%2.51%
Revenue Next Year4.06%
Revenue Next 2Y4.39%
Revenue Next 3Y4.61%
Revenue Next 5Y4.82%
EBIT growth 1Y0.33%
EBIT growth 3Y4.3%
EBIT growth 5Y-2.37%
EBIT Next Year17.36%
EBIT Next 3Y10.2%
EBIT Next 5Y10.91%
FCF growth 1Y31.17%
FCF growth 3Y2.1%
FCF growth 5Y-2.4%
OCF growth 1Y29.36%
OCF growth 3Y2.84%
OCF growth 5Y-0.64%