MEDTRONIC PLC (MDT) Stock Fundamental Analysis
NYSE:MDT - New York Stock Exchange, Inc. - IE00BTN1Y115 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to MDT. MDT was compared to 189 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 is not valued too expensively and it also shows a decent growth rate. Finally 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.
Each year in the past 5 years MDT has been profitable.
MDT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MDT has a Return On Assets of 4.73%. This is amongst the best in the industry. MDT outperforms 83.60% of its industry peers.
With an excellent Return On Equity value of 8.63%, MDT belongs to the best of the industry, outperforming 85.19% of the companies in the same industry.
MDT's Return On Invested Capital of 6.09% is amongst the best of the industry. MDT outperforms 80.42% of its industry peers.
The Average Return On Invested Capital over the past 3 years 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 better Profit Margin (12.83%) than 89.95% of its industry peers.
MDT's Profit Margin has declined in the last couple of years.
MDT has a better Operating Margin (19.47%) than 92.59% of its industry peers.
MDT's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 65.59%, MDT is in the better half of the industry, outperforming 67.20% of the companies in the same industry.
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 | 19.47% | ||
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so MDT is destroying value.
The number of shares outstanding for MDT has been reduced compared to 1 year ago.
Compared to 5 years ago, MDT has less shares outstanding
MDT has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.84 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 (2.84) than 69.84% 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 better Debt to FCF ratio (4.87) than 80.95% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that MDT is not too dependend on debt financing.
MDT's Debt to Equity ratio of 0.49 is in line compared to the rest of the industry. MDT outperforms 40.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 4.87 | ||
| Altman-Z | 2.84 |
ROIC/WACC0.91
WACC6.71%
2.3 Liquidity
A Current Ratio of 1.90 indicates that MDT should not have too much problems paying its short term obligations.
MDT's Current ratio of 1.90 is on the low side compared to the rest of the industry. MDT is outperformed by 69.31% of its industry peers.
A Quick Ratio of 1.43 indicates that MDT should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.43, MDT is not doing good in the industry: 64.02% of the companies in the same industry are doing better.
| 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.
MDT shows a small growth in Revenue. In the last year, the Revenue has grown by 2.72%.
Measured over the past years, MDT shows a small growth in Revenue. The Revenue has been growing by 1.16% on average per year.
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
Based on estimates for the next years, MDT will show a small growth in Earnings Per Share. The EPS will grow by 7.01% on average per year.
The Revenue is expected to grow by 4.70% on average over the next years.
EPS Next Y5.72%
EPS Next 2Y6.3%
EPS Next 3Y6.82%
EPS Next 5Y7.01%
Revenue Next Year3.9%
Revenue Next 2Y4.18%
Revenue Next 3Y4.49%
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
A Price/Earnings ratio of 15.65 indicates a correct valuation of MDT.
MDT's Price/Earnings ratio is rather cheap when compared to the industry. MDT is cheaper than 84.13% of the companies in the same industry.
When comparing the Price/Earnings ratio of MDT to the average of the S&P500 Index (28.88), we can say MDT is valued slightly cheaper.
The Price/Forward Earnings ratio is 14.19, which indicates a correct valuation of MDT.
85.71% 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 (21.20), we can say MDT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.65 | ||
| Fwd PE | 14.19 |
4.2 Price Multiples
MDT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. MDT is cheaper than 83.60% of the companies in the same industry.
88.36% 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 | 19.61 | ||
| EV/EBITDA | 13.21 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MDT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.74
PEG (5Y)N/A
EPS Next 2Y6.3%
EPS Next 3Y6.82%
5. Dividend
5.1 Amount
MDT has a Yearly Dividend Yield of 3.32%.
Compared to an average industry Dividend Yield of 1.87, MDT pays a better dividend. On top of this MDT pays more dividend than 98.41% of the companies listed in the same industry.
MDT's Dividend Yield is a higher than the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.32% |
5.2 History
On average, the dividend of MDT grows each year by 6.78%, which is quite nice.
MDT has been paying a dividend for at least 10 years, so it has 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%
83.56
-1.2 (-1.42%)
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 Change0.33%
Ins Owners0.24%
Ins Owner Change1.2%
Market Cap107.17B
Analysts71.89
Price Target97.83 (17.08%)
Short Float %0.99%
Short Ratio1.58
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.32% |
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)0.67%
PT rev (3m)0.42%
EPS NQ rev (1m)0.02%
EPS NQ rev (3m)-1.87%
EPS NY rev (1m)0.02%
EPS NY rev (3m)0.01%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)-0.56%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.65 | ||
| Fwd PE | 14.19 | ||
| P/S | 3.23 | ||
| P/FCF | 19.61 | ||
| P/OCF | 14.7 | ||
| P/B | 2.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.21 |
EPS(TTM)5.34
EY6.39%
EPS(NY)5.89
Fwd EY7.05%
FCF(TTM)4.26
FCFY5.1%
OCF(TTM)5.69
OCFY6.8%
SpS25.89
BVpS38.51
TBVpS-2.82
PEG (NY)2.74
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 | 2.84 |
F-Score6
WACC6.71%
ROIC/WACC0.91
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 Year3.9%
Revenue Next 2Y4.18%
Revenue Next 3Y4.49%
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%