MEDTRONIC PLC (MDT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MDT - IE00BTN1Y115 - Common Stock
100.88 USD
-0.46 (-0.45%)
101 USD
+0.12 (+0.12%)
Overall MDT gets a fundamental rating of 6 out of 10. We evaluated MDT against 186 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. MDT also has an excellent dividend rating. This makes MDT very considerable 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
- Looking at the Return On Assets, with a value of 5.22%, MDT belongs to the top of the industry, outperforming 81.72% of the companies in the same industry.
- MDT has a Return On Equity of 9.79%. This is amongst the best in the industry. MDT outperforms 85.48% of its industry peers.
- MDT has a Return On Invested Capital of 6.63%. This is amongst the best in the industry. MDT outperforms 81.18% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for MDT is below the industry average of 8.84%.
- 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 better Profit Margin (13.71%) than 89.78% 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 93.01% of its industry peers.
- In the last couple of years the Operating Margin of MDT has remained more or less at the same level.
- MDT's Gross Margin of 65.57% is fine compared to the rest of the industry. MDT outperforms 69.89% of its industry peers.
- In the last couple of years the Gross Margin of MDT has remained more or less at the same level.
| 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.
- 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 3.12 indicates that MDT is not in any danger for bankruptcy at the moment.
- MDT's Altman-Z score of 3.12 is fine compared to the rest of the industry. MDT outperforms 68.82% 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.
- MDT's Debt to FCF ratio of 5.59 is fine compared to the rest of the industry. MDT outperforms 78.49% 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 61.29% 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
WACC6.92%
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.
- The Current ratio of MDT (2.42) is comparable to the rest of the industry.
- A Quick Ratio of 1.80 indicates that MDT should not have too much problems paying its short term obligations.
- The Quick ratio of MDT (1.80) is comparable to the rest of the 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.
- MDT shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.68% yearly.
- The Revenue has been growing slightly by 5.34% in the past year.
- The Revenue has been growing slightly by 3.01% on average over the past years.
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
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- 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
- The Price/Earnings ratio is 17.92, which indicates a rather expensive current valuation of MDT.
- Compared to the rest of the industry, the Price/Earnings ratio of MDT indicates a rather cheap valuation: MDT is cheaper than 83.33% of the companies listed in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.21. MDT is valued slightly cheaper when compared to this.
- A Price/Forward Earnings ratio of 16.32 indicates a correct valuation of MDT.
- 86.56% 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 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.92 | ||
| Fwd PE | 16.32 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, MDT is valued cheaply inside the industry as 82.26% of the companies are valued more expensively.
- 84.41% of the companies in the same industry are more expensive than MDT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.84 | ||
| EV/EBITDA | 14.65 |
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)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.
- Compared to an average industry Dividend Yield of 0.20, MDT pays a better dividend. On top of this MDT pays more dividend than 98.39% 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 1.81.
| 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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.1%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- 75.86% 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.
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 17.92 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.