MEDTRONIC PLC (MDT) Stock Fundamental Analysis
NYSE:MDT - New York Stock Exchange, Inc. - IE00BTN1Y115 - Common Stock - Currency: USD
MDT gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 190 industry peers in the Health Care Equipment & Supplies industry. While MDT belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MDT has a decent growth rate and is not valued too expensively. Finally MDT also has an excellent dividend rating. With these ratings, MDT could be worth investigating further for dividend investing!.
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.
Each year in the past 5 years MDT had a positive operating cash flow.
1.2 Ratios
MDT has a better Return On Assets (4.73%) than 83.77% of its industry peers.
MDT's Return On Equity of 8.63% is amongst the best of the industry. MDT outperforms 84.29% of its industry peers.
MDT has a Return On Invested Capital of 6.09%. This is amongst the best in the industry. MDT outperforms 81.15% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MDT is in line with the industry average of 7.68%.
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
MDT has a Profit Margin of 12.83%. This is amongst the best in the industry. MDT outperforms 90.05% 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 19.47%, MDT belongs to the top of the industry, outperforming 92.67% of the companies in the same industry.
In the last couple of years the Operating Margin of MDT has declined.
Looking at the Gross Margin, with a value of 65.59%, MDT is in the better half of the industry, outperforming 67.54% of the companies in the same industry.
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
MDT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for MDT has been reduced compared to 1 year ago.
MDT has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, MDT has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.80 indicates that MDT is not a great score, but indicates only limited risk for bankruptcy at the moment.
MDT has a better Altman-Z score (2.80) than 70.16% of its industry peers.
MDT has a debt to FCF ratio of 4.87. This is a neutral value as MDT would need 4.87 years to pay back of all of its debts.
MDT has a Debt to FCF ratio of 4.87. This is amongst the best in the industry. MDT outperforms 81.15% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that MDT is not too dependend on debt financing.
The Debt to Equity ratio of MDT (0.49) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 4.87 | ||
| Altman-Z | 2.8 |
ROIC/WACC0.95
WACC6.43%
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.
MDT has a worse Current ratio (1.90) than 67.02% of its industry peers.
A Quick Ratio of 1.43 indicates that MDT should not have too much problems paying its short term obligations.
The Quick ratio of MDT (1.43) is worse than 62.30% 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
MDT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.01% yearly.
Based on estimates for the next years, MDT will show a small growth in Revenue. The Revenue will grow by 4.70% on average per year.
EPS Next Y5.72%
EPS Next 2Y6.3%
EPS Next 3Y6.82%
EPS Next 5Y7.01%
Revenue Next Year3.89%
Revenue Next 2Y4.17%
Revenue Next 3Y4.48%
Revenue Next 5Y4.7%
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
MDT is valuated correctly with a Price/Earnings ratio of 15.47.
Compared to the rest of the industry, the Price/Earnings ratio of MDT indicates a rather cheap valuation: MDT is cheaper than 85.34% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of MDT to the average of the S&P500 Index (28.29), we can say MDT is valued slightly cheaper.
With a Price/Forward Earnings ratio of 14.03, MDT is valued correctly.
Based on the Price/Forward Earnings ratio, MDT is valued cheaper than 85.34% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of MDT to the average of the S&P500 Index (21.08), we can say MDT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.47 | ||
| Fwd PE | 14.03 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MDT indicates a rather cheap valuation: MDT is cheaper than 83.25% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, MDT is valued cheaper than 87.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.38 | ||
| EV/EBITDA | 12.9 |
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.
MDT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.7
PEG (5Y)N/A
EPS Next 2Y6.3%
EPS Next 3Y6.82%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.39%, MDT has a reasonable but not impressive dividend return.
MDT's Dividend Yield is rather good when compared to the industry average which is at 1.93. MDT pays more dividend than 98.43% of the companies in the same industry.
MDT's Dividend Yield is a higher than the S&P500 average which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.39% |
5.2 History
On average, the dividend of MDT grows each year by 6.78%, which is quite nice.
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)6.78%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
84.62% of the earnings are spent on dividend by MDT. 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.
DP84.62%
EPS Next 2Y6.3%
EPS Next 3Y6.82%
82.6
-0.1 (-0.12%)
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 Change0.27%
Ins Owners0.24%
Ins Owner Change1.2%
Market Cap105.94B
Analysts71.89
Price Target98.09 (18.75%)
Short Float %1.06%
Short Ratio1.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.39% |
Yearly Dividend2.77
Dividend Growth(5Y)6.78%
DP84.62%
Div Incr Years10
Div Non Decr Years10
Ex-Date
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)0.94%
PT rev (3m)0.69%
EPS NQ rev (1m)0.05%
EPS NQ rev (3m)-1.87%
EPS NY rev (1m)0%
EPS NY rev (3m)0.01%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)-0.56%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.47 | ||
| Fwd PE | 14.03 | ||
| P/S | 3.19 | ||
| P/FCF | 19.38 | ||
| P/OCF | 14.53 | ||
| P/B | 2.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.9 |
EPS(TTM)5.34
EY6.46%
EPS(NY)5.89
Fwd EY7.13%
FCF(TTM)4.26
FCFY5.16%
OCF(TTM)5.69
OCFY6.88%
SpS25.89
BVpS38.51
TBVpS-2.82
PEG (NY)2.7
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 | 2.8 |
F-Score6
WACC6.43%
ROIC/WACC0.95
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 2Y6.3%
EPS Next 3Y6.82%
EPS Next 5Y7.01%
Revenue 1Y (TTM)2.72%
Revenue growth 3Y2.43%
Revenue growth 5Y1.16%
Sales Q2Q%2.51%
Revenue Next Year3.89%
Revenue Next 2Y4.17%
Revenue Next 3Y4.48%
Revenue Next 5Y4.7%
EBIT growth 1Y0.33%
EBIT growth 3Y4.3%
EBIT growth 5Y-2.37%
EBIT Next Year17.45%
EBIT Next 3Y10.11%
EBIT Next 5Y2.66%
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%