MEDTRONIC PLC (MDT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MDT - IE00BTN1Y115 - Common Stock
100.79 USD
+0.1 (+0.1%)
100.79 USD
0 (0%)
Overall MDT gets a fundamental rating of 6 out of 10. We evaluated MDT against 184 industry peers in the Health Care Equipment & Supplies industry. MDT has an excellent profitability rating, but there are some minor concerns on its financial health. MDT has a correct valuation and a medium growth rate. Finally MDT also has an excellent dividend rating. These ratings could make MDT a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
- In the past year MDT was profitable.
- In the past year MDT had a positive cash flow from operations.
- In the past 5 years MDT has always been profitable.
- Each year in the past 5 years MDT had a positive operating cash flow.
1.2 Ratios
- MDT has a Return On Assets of 5.22%. This is amongst the best in the industry. MDT outperforms 82.07% of its industry peers.
- MDT has a better Return On Equity (9.79%) than 85.87% of its industry peers.
- With an excellent Return On Invested Capital value of 6.63%, MDT belongs to the best of the industry, outperforming 80.98% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for MDT is below the industry average of 8.81%.
- The 3 year average ROIC (6.35%) for MDT is below the current ROIC(6.63%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.22% | ||
| ROE | 9.79% | ||
| ROIC | 6.63% |
ROA(3y)4.43%
ROA(5y)4.54%
ROE(3y)8.11%
ROE(5y)8.19%
ROIC(3y)6.35%
ROIC(5y)6.24%
1.3 Margins
- MDT has a Profit Margin of 13.71%. This is amongst the best in the industry. MDT outperforms 90.22% of its industry peers.
- MDT's Profit Margin has declined in the last couple of years.
- Looking at the Operating Margin, with a value of 19.42%, MDT belongs to the top of the industry, outperforming 92.93% of the companies in the same industry.
- MDT's Operating Margin has been stable in the last couple of years.
- MDT's Gross Margin of 65.57% is fine compared to the rest of the industry. MDT outperforms 70.11% of its industry peers.
- MDT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.42% | ||
| PM (TTM) | 13.71% | ||
| GM | 65.57% |
OM growth 3Y-3.47%
OM growth 5Y0.37%
PM growth 3Y-4.39%
PM growth 5Y-3.44%
GM growth 3Y-1.55%
GM growth 5Y-0.76%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), MDT is destroying value.
- MDT has less shares outstanding than it did 1 year ago.
- MDT has less shares outstanding than it did 5 years ago.
- MDT has a worse debt/assets ratio than last year.
2.2 Solvency
- MDT has an Altman-Z score of 3.11. This indicates that MDT is financially healthy and has little risk of bankruptcy at the moment.
- With a decent Altman-Z score value of 3.11, MDT is doing good in the industry, outperforming 69.02% of the companies in the same industry.
- MDT has a debt to FCF ratio of 5.59. This is a neutral value as MDT would need 5.59 years to pay back of all of its debts.
- MDT has a Debt to FCF ratio of 5.59. This is in the better half of the industry: MDT outperforms 78.26% of its industry peers.
- A Debt/Equity ratio of 0.57 indicates that MDT is somewhat dependend on debt financing.
- MDT has a Debt to Equity ratio of 0.57. This is in the lower half of the industry: MDT underperforms 60.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 5.59 | ||
| Altman-Z | 3.11 |
ROIC/WACC0.96
WACC6.91%
2.3 Liquidity
- A Current Ratio of 2.42 indicates that MDT has no problem at all paying its short term obligations.
- With a Current ratio value of 2.42, MDT perfoms like the industry average, outperforming 48.91% of the companies in the same industry.
- A Quick Ratio of 1.80 indicates that MDT should not have too much problems paying its short term obligations.
- MDT has a Quick ratio (1.80) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.42 | ||
| Quick Ratio | 1.8 |
3. Growth
3.1 Past
- MDT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.24%.
- Measured over the past 5 years, MDT shows a small growth in Earnings Per Share. The EPS has been growing by 3.68% on average per year.
- Looking at the last year, MDT shows a small growth in Revenue. The Revenue has grown by 5.34% in the last year.
- Measured over the past years, MDT shows a small growth in Revenue. The Revenue has been growing by 3.01% on average per year.
EPS 1Y (TTM)7.24%
EPS 3Y-0.72%
EPS 5Y3.68%
EPS Q2Q%7.94%
Revenue 1Y (TTM)5.34%
Revenue growth 3Y1.91%
Revenue growth 5Y3.01%
Sales Q2Q%6.64%
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 6.08% on average per year.
- Based on estimates for the next years, MDT will show a small growth in Revenue. The Revenue will grow by 5.80% on average per year.
EPS Next Y3.62%
EPS Next 2Y6.02%
EPS Next 3Y6.42%
EPS Next 5Y6.08%
Revenue Next Year7.67%
Revenue Next 2Y6.75%
Revenue Next 3Y6.25%
Revenue Next 5Y5.8%
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
- With a Price/Earnings ratio of 17.90, MDT is valued on the expensive side.
- MDT's Price/Earnings ratio is rather cheap when compared to the industry. MDT is cheaper than 84.24% of the companies in the same industry.
- When comparing the Price/Earnings ratio of MDT to the average of the S&P500 Index (28.60), we can say MDT is valued slightly cheaper.
- Based on the Price/Forward Earnings ratio of 16.30, the valuation of MDT can be described as correct.
- 86.41% of the companies in the same industry are more expensive than MDT, based on the Price/Forward Earnings ratio.
- MDT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.9 | ||
| Fwd PE | 16.3 |
4.2 Price Multiples
- 82.07% of the companies in the same industry are more expensive than MDT, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of MDT indicates a rather cheap valuation: MDT is cheaper than 84.24% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.82 | ||
| EV/EBITDA | 14.62 |
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)4.95
PEG (5Y)4.86
EPS Next 2Y6.02%
EPS Next 3Y6.42%
5. Dividend
5.1 Amount
- MDT has a Yearly Dividend Yield of 2.80%.
- Compared to an average industry Dividend Yield of 0.20, MDT pays a better dividend. On top of this MDT pays more dividend than 98.37% of the companies listed in the same industry.
- MDT's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.8% |
5.2 History
- The dividend of MDT has a limited annual growth rate of 5.10%.
- MDT has paid a dividend for at least 10 years, which is a reliable track record.
- MDT has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.1%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- MDT pays out 75.86% of its income as dividend. This is not a sustainable payout ratio.
- MDT's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP75.86%
EPS Next 2Y6.02%
EPS Next 3Y6.42%
MEDTRONIC PLC / MDT FAQ
What is the fundamental rating for MDT stock?
ChartMill assigns a fundamental rating of 6 / 10 to MDT.
What is the valuation status for MDT stock?
ChartMill assigns a valuation rating of 6 / 10 to MEDTRONIC PLC (MDT). This can be considered as Fairly Valued.
What is the profitability of MDT stock?
MEDTRONIC PLC (MDT) has a profitability rating of 8 / 10.
What is the valuation of MEDTRONIC PLC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for MEDTRONIC PLC (MDT) is 17.9 and the Price/Book (PB) ratio is 2.66.
What is the earnings growth outlook for MEDTRONIC PLC?
The Earnings per Share (EPS) of MEDTRONIC PLC (MDT) is expected to grow by 3.62% in the next year.