MEDTRONIC PLC (MDT) Stock Fundamental Analysis
NYSE:MDT - New York Stock Exchange, Inc. - IE00BTN1Y115 - Common Stock - Currency: USD
Overall MDT gets a fundamental rating of 6 out of 10. We evaluated MDT against 187 industry peers in the Health Care Equipment & Supplies industry. MDT scores excellent on profitability, but there are some minor concerns on its financial health. MDT is valued quite cheap, while showing a decent growth score. This is a good combination! MDT also has an excellent dividend rating. This makes MDT very considerable for value and 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.
Each year in the past 5 years MDT has 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 5.09%, MDT belongs to the top of the industry, outperforming 83.42% of the companies in the same industry.
MDT's Return On Equity of 9.71% is amongst the best of the industry. MDT outperforms 84.49% of its industry peers.
MDT has a Return On Invested Capital of 6.67%. This is amongst the best in the industry. MDT outperforms 81.82% of its industry peers.
MDT had an Average Return On Invested Capital over the past 3 years of 6.35%. This is in line with the industry average of 8.03%.
The 3 year average ROIC (6.35%) for MDT is below the current ROIC(6.67%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.09% | ||
| ROE | 9.71% | ||
| ROIC | 6.67% |
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 Profit Margin of 13.90%. This is amongst the best in the industry. MDT outperforms 90.91% 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 19.61%, MDT belongs to the top of the industry, outperforming 93.05% of the companies in the same industry.
MDT's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 65.39%, MDT is in the better half of the industry, outperforming 68.45% 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 | 19.61% | ||
| PM (TTM) | 13.9% | ||
| GM | 65.39% |
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
MDT has an Altman-Z score of 2.85. This is not the best score and indicates that MDT is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.85, MDT is in the better half of the industry, outperforming 65.78% of the companies in the same industry.
The Debt to FCF ratio of MDT is 5.50, which is a neutral value as it means it would take MDT, 5.50 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of MDT (5.50) is better than 80.21% of its industry peers.
MDT has a Debt/Equity ratio of 0.53. This is a neutral value indicating MDT is somewhat dependend on debt financing.
MDT has a worse Debt to Equity ratio (0.53) than 65.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 5.5 | ||
| Altman-Z | 2.85 |
ROIC/WACC1
WACC6.68%
2.3 Liquidity
A Current Ratio of 1.85 indicates that MDT should not have too much problems paying its short term obligations.
MDT's Current ratio of 1.85 is on the low side compared to the rest of the industry. MDT is outperformed by 68.45% of its industry peers.
MDT has a Quick Ratio of 1.42. This is a normal value and indicates that MDT is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.42, MDT is doing worse than 62.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.85 | ||
| Quick Ratio | 1.42 |
3. Growth
3.1 Past
MDT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.57%.
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.
MDT shows a small growth in Revenue. In the last year, the Revenue has grown by 3.62%.
The Revenue has been growing slightly by 3.01% on average over the past years.
EPS 1Y (TTM)5.57%
EPS 3Y-0.72%
EPS 5Y3.68%
EPS Q2Q%10.96%
Revenue 1Y (TTM)3.62%
Revenue growth 3Y1.91%
Revenue growth 5Y3.01%
Sales Q2Q%3.94%
3.2 Future
MDT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.26% yearly.
Based on estimates for the next years, MDT will show a small growth in Revenue. The Revenue will grow by 5.13% on average per year.
EPS Next Y1.94%
EPS Next 2Y4.85%
EPS Next 3Y5.79%
EPS Next 5Y6.26%
Revenue Next Year5.4%
Revenue Next 2Y5.33%
Revenue Next 3Y5.17%
Revenue Next 5Y5.13%
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
Based on the Price/Earnings ratio of 16.91, the valuation of MDT can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of MDT indicates a rather cheap valuation: MDT is cheaper than 82.35% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.87, MDT is valued a bit cheaper.
A Price/Forward Earnings ratio of 16.59 indicates a correct valuation of MDT.
Based on the Price/Forward Earnings ratio, MDT is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of MDT to the average of the S&P500 Index (35.34), we can say MDT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.91 | ||
| Fwd PE | 16.59 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MDT is valued cheaper than 80.75% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MDT is valued cheaper than 84.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.99 | ||
| EV/EBITDA | 13.85 |
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)8.71
PEG (5Y)4.59
EPS Next 2Y4.85%
EPS Next 3Y5.79%
5. Dividend
5.1 Amount
MDT has a Yearly Dividend Yield of 3.11%.
Compared to an average industry Dividend Yield of 1.77, MDT pays a better dividend. On top of this MDT pays more dividend than 98.40% of the companies listed in the same industry.
MDT's Dividend Yield is a higher than the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.11% |
5.2 History
The dividend of MDT has a limited annual growth rate of 5.10%.
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)5.1%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
76.98% of the earnings are spent on dividend by MDT. This is not a sustainable payout ratio.
The dividend of MDT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP76.98%
EPS Next 2Y4.85%
EPS Next 3Y5.79%
93.02
+1.04 (+1.13%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners86.73%
Inst Owner Change-0.34%
Ins Owners0.26%
Ins Owner Change6.72%
Market Cap119.18B
Analysts73.85
Price Target98.36 (5.74%)
Short Float %1.02%
Short Ratio1.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.11% |
Yearly Dividend2.77
Dividend Growth(5Y)5.1%
DP76.98%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.4%
Min EPS beat(2)1.21%
Max EPS beat(2)1.59%
EPS beat(4)3
Avg EPS beat(4)1.09%
Min EPS beat(4)-0.08%
Max EPS beat(4)1.65%
EPS beat(8)6
Avg EPS beat(8)2.27%
EPS beat(12)8
Avg EPS beat(12)1.68%
EPS beat(16)10
Avg EPS beat(16)1.43%
Revenue beat(2)1
Avg Revenue beat(2)-0.61%
Min Revenue beat(2)-1.38%
Max Revenue beat(2)0.17%
Revenue beat(4)3
Avg Revenue beat(4)-0.05%
Min Revenue beat(4)-1.38%
Max Revenue beat(4)0.59%
Revenue beat(8)6
Avg Revenue beat(8)0.24%
Revenue beat(12)9
Avg Revenue beat(12)0.4%
Revenue beat(16)10
Avg Revenue beat(16)-0.28%
PT rev (1m)1.29%
PT rev (3m)0.39%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.12%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.77%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)0.71%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.91 | ||
| Fwd PE | 16.59 | ||
| P/S | 3.55 | ||
| P/FCF | 22.99 | ||
| P/OCF | 16.92 | ||
| P/B | 2.48 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.85 |
EPS(TTM)5.5
EY5.91%
EPS(NY)5.61
Fwd EY6.03%
FCF(TTM)4.05
FCFY4.35%
OCF(TTM)5.5
OCFY5.91%
SpS26.18
BVpS37.48
TBVpS-4.2
PEG (NY)8.71
PEG (5Y)4.59
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.09% | ||
| ROE | 9.71% | ||
| ROCE | 8.34% | ||
| ROIC | 6.67% | ||
| ROICexc | 7.53% | ||
| ROICexgc | 32% | ||
| OM | 19.61% | ||
| PM (TTM) | 13.9% | ||
| GM | 65.39% | ||
| FCFM | 15.46% |
ROA(3y)4.43%
ROA(5y)4.54%
ROE(3y)8.11%
ROE(5y)8.19%
ROIC(3y)6.35%
ROIC(5y)6.24%
ROICexc(3y)7.09%
ROICexc(5y)7.05%
ROICexgc(3y)29.85%
ROICexgc(5y)33.32%
ROCE(3y)7.94%
ROCE(5y)7.8%
ROICexcg growth 3Y-11.61%
ROICexcg growth 5Y-5.52%
ROICexc growth 3Y-2.49%
ROICexc growth 5Y3.26%
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%
F-Score6
Asset Turnover0.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 5.5 | ||
| Debt/EBITDA | 2.72 | ||
| Cap/Depr | 64.98% | ||
| Cap/Sales | 5.54% | ||
| Interest Coverage | 8.63 | ||
| Cash Conversion | 74.65% | ||
| Profit Quality | 111.22% | ||
| Current Ratio | 1.85 | ||
| Quick Ratio | 1.42 | ||
| Altman-Z | 2.85 |
F-Score6
WACC6.68%
ROIC/WACC1
Cap/Depr(3y)59.68%
Cap/Depr(5y)55.94%
Cap/Sales(3y)5.04%
Cap/Sales(5y)4.79%
Profit Quality(3y)124.85%
Profit Quality(5y)125.74%
High Growth Momentum
Growth
EPS 1Y (TTM)5.57%
EPS 3Y-0.72%
EPS 5Y3.68%
EPS Q2Q%10.96%
EPS Next Y1.94%
EPS Next 2Y4.85%
EPS Next 3Y5.79%
EPS Next 5Y6.26%
Revenue 1Y (TTM)3.62%
Revenue growth 3Y1.91%
Revenue growth 5Y3.01%
Sales Q2Q%3.94%
Revenue Next Year5.4%
Revenue Next 2Y5.33%
Revenue Next 3Y5.17%
Revenue Next 5Y5.13%
EBIT growth 1Y7.42%
EBIT growth 3Y-1.62%
EBIT growth 5Y3.4%
EBIT Next Year18.1%
EBIT Next 3Y9.83%
EBIT Next 5Y8.8%
FCF growth 1Y-0.29%
FCF growth 3Y-4.64%
FCF growth 5Y-2.95%
OCF growth 1Y3.79%
OCF growth 3Y-1.39%
OCF growth 5Y-0.53%