Medtronic's Troubled Past and Future Opportunities

Medtronic's shares have lost a third of their value since mid-2021, lifting the dividend yield to 3.1%. The company's growth has stalled, but management is addressing the issue. A lower-margin business is being spun off to improve profitability. Despite challenges, Medtronic has a strong history and rewards investors with annual dividend increases for 48 consecutive years.

Medtronic's shares have experienced a significant decline, losing a third of their value since mid-2021, which has lifted the dividend yield to 3.1% [1]. Despite this setback, the company's management is addressing growth challenges and implementing strategic moves to improve profitability.

Medtronic's dividend yield has historically been attractive, with the stock currently offering a yield of 3.1%, significantly higher than the S&P 500 index's 1.2% yield and the average healthcare stock's 1.8% yield [1]. The company has maintained a record of increasing its dividend annually for 48 consecutive years, which underscores its commitment to shareholder returns and stability as an S&P 500 Dividend Aristocrat [2, 3].

The company's recent earnings have shown growth in both sales and net income, contributing to a 6% increase in its share price over the last quarter [2, 3]. This positive performance, along with its consistent dividend growth, has helped maintain the company's share price stability despite broader market fluctuations.

Medtronic is also addressing its growth challenges by working on new products and spinning off lower-margin businesses. The company plans to spin off its diabetes business next year, which is expected to be accretive to its overall profitability [1]. This move aims to free up capital for research and development or to acquire smaller healthcare businesses with interesting technologies.

While Medtronic faces challenges in the near term, such as the diabetes spinoff acting as a headwind, investors with a long-term perspective may find the company's historically high dividend yield and strong dividend growth record appealing. If you are a dividend investor, Medtronic's high yield and consistent dividend growth could make it an attractive investment opportunity.

References:
[1] https://www.nasdaq.com/articles/3-things-you-need-know-if-you-buy-medtronic-today
[2] https://simplywall.st/stocks/us/healthcare/nyse-mdt/medtronic/news/medtronic-mdt-declares-us071-dividend-confirming-48-years-of
[3] https://finance.yahoo.com/news/medtronic-mdt-declares-us-0-171641603.html