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%)
Taking everything into account, MDT scores 6 out of 10 in our fundamental rating. MDT was compared to 184 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 is not valued too expensively and it also shows a decent growth rate. 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.
- MDT had a positive operating cash flow in the past year.
- In the past 5 years MDT has always been profitable.
- In the past 5 years MDT always reported a positive cash flow from operatings.
1.2 Ratios
- MDT's Return On Assets of 5.22% is amongst the best of the industry. MDT outperforms 82.07% of its industry peers.
- MDT has a Return On Equity of 9.79%. This is amongst the best in the industry. MDT outperforms 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 last Return On Invested Capital (6.63%) for MDT is above the 3 year average (6.35%), which is a sign of increasing profitability.
| 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 better Profit Margin (13.71%) than 90.22% of its industry peers.
- In the last couple of years the Profit Margin of MDT has declined.
- MDT has a better Operating Margin (19.42%) than 92.93% of its industry peers.
- MDT's Operating Margin has been stable in the last couple of years.
- With a decent Gross Margin value of 65.57%, MDT is doing good in the industry, outperforming 70.11% 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 | 19.42% | ||
| 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
- 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.
- The number of shares outstanding for MDT has been reduced compared to 5 years ago.
- The debt/assets ratio for MDT is higher compared to a year ago.
2.2 Solvency
- MDT has an Altman-Z score of 3.12. This indicates that MDT is financially healthy and has little risk of bankruptcy at the moment.
- MDT has a better Altman-Z score (3.12) than 69.02% of its industry peers.
- 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.
- The Debt to FCF ratio of MDT (5.59) is better than 78.26% of its industry peers.
- A Debt/Equity ratio of 0.57 indicates that MDT is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.57, MDT is doing worse than 60.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 5.59 | ||
| Altman-Z | 3.12 |
ROIC/WACC0.96
WACC6.91%
2.3 Liquidity
- MDT has a Current Ratio of 2.42. This indicates that MDT is financially healthy and has no problem in meeting its short term obligations.
- MDT has a Current ratio (2.42) which is in line with its industry peers.
- A Quick Ratio of 1.80 indicates that MDT should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.80, MDT is in line with its industry, outperforming 48.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.42 | ||
| Quick Ratio | 1.8 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 7.24% over the past year.
- 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.
- MDT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.01% yearly.
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
- The Earnings Per Share is expected to grow by 6.08% on average over the next years.
- The Revenue is expected to grow by 5.80% on average over the next years.
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- MDT is valuated rather expensively with a Price/Earnings ratio of 17.90.
- 84.24% of the companies in the same industry are more expensive than MDT, based on the Price/Earnings ratio.
- MDT is valuated rather cheaply when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 16.30, MDT is valued correctly.
- 85.87% of the companies in the same industry are more expensive than MDT, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of MDT to the average of the S&P500 Index (25.83), we can say MDT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.9 | ||
| Fwd PE | 16.3 |
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 82.07% of the companies listed in the same industry.
- 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 | 14.64 |
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%. Purely for dividend investing, there may be better candidates out there.
- MDT's Dividend Yield is rather good when compared to the industry average which is at 0.20. MDT pays more dividend than 98.37% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, MDT pays a better dividend.
| 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.
- The dividend of MDT is growing around the same rate as the earnings are growing. If this keeps up 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.