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 503 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 has a correct valuation and a medium 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.
MDT had positive earnings in each of the past 5 years.
In the past 5 years MDT always reported a positive cash flow from operatings.
1.2 Ratios
MDT has a Return On Assets of 5.09%. This is amongst the best in the industry. MDT outperforms 84.57% of its industry peers.
Looking at the Return On Equity, with a value of 9.71%, MDT belongs to the top of the industry, outperforming 85.11% of the companies in the same industry.
The Return On Invested Capital of MDT (6.74%) is better than 81.91% of its industry peers.
MDT had an Average Return On Invested Capital over the past 3 years of 6.40%. This is significantly below the industry average of 13.70%.
The last Return On Invested Capital (6.74%) for MDT is above the 3 year average (6.40%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.09% | ||
| ROE | 9.71% | ||
| ROIC | 6.74% |
ROA(3y)4.43%
ROA(5y)4.54%
ROE(3y)8.11%
ROE(5y)8.19%
ROIC(3y)6.4%
ROIC(5y)6.26%
1.3 Margins
With an excellent Profit Margin value of 13.90%, MDT belongs to the best of the industry, outperforming 92.02% of the companies in the same industry.
In the last couple of years the Profit Margin of MDT has declined.
With an excellent Operating Margin value of 19.80%, MDT belongs to the best of the industry, outperforming 93.09% of the companies in the same industry.
In the last couple of years the Operating Margin of MDT has remained more or less at the same level.
The Gross Margin of MDT (65.48%) is better than 68.09% 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 | 19.8% | ||
| PM (TTM) | 13.9% | ||
| GM | 65.48% |
OM growth 3Y-2.78%
OM growth 5Y0.8%
PM growth 3Y-4.39%
PM growth 5Y-3.44%
GM growth 3Y-1.44%
GM growth 5Y-0.69%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MDT is creating some 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
Compared to 1 year ago, MDT has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.79 indicates that MDT is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.79, MDT is in the better half of the industry, outperforming 67.55% of the companies in the same industry.
MDT has a debt to FCF ratio of 5.50. This is a neutral value as MDT would need 5.50 years to pay back of all of its debts.
MDT has a Debt to FCF ratio of 5.50. This is amongst the best in the industry. MDT outperforms 80.32% of its industry peers.
A Debt/Equity ratio of 0.53 indicates that MDT is somewhat dependend on debt financing.
MDT has a Debt to Equity ratio of 0.53. This is in the lower half of the industry: MDT underperforms 64.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 5.5 | ||
| Altman-Z | 2.79 |
ROIC/WACC1.01
WACC6.66%
2.3 Liquidity
MDT has a Current Ratio of 1.85. This is a normal value and indicates that MDT is financially healthy and should not expect problems in meeting its short term obligations.
MDT has a worse Current ratio (1.85) than 68.62% 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.
With a Quick ratio value of 1.42, MDT is not doing good in the industry: 61.70% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.85 | ||
| Quick Ratio | 1.42 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.57% 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.
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
The Earnings Per Share is expected to grow by 6.18% on average over the next years.
Based on estimates for the next years, MDT will show a small growth in Revenue. The Revenue will grow by 5.02% on average per year.
EPS Next Y7.04%
EPS Next 2Y7.32%
EPS Next 3Y5.73%
EPS Next 5Y6.18%
Revenue Next Year5.37%
Revenue Next 2Y5.32%
Revenue Next 3Y5.08%
Revenue Next 5Y5.02%
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
Based on the Price/Earnings ratio of 16.09, 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 81.91% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.60. MDT is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 15.03 indicates a correct valuation of MDT.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MDT indicates a rather cheap valuation: MDT is cheaper than 82.98% of the companies listed in the same industry.
MDT's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.09 | ||
| Fwd PE | 15.03 |
4.2 Price Multiples
82.98% of the companies in the same industry are more expensive than MDT, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, MDT is valued cheaply inside the industry as 86.17% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.89 | ||
| EV/EBITDA | 13.29 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of MDT may justify a higher PE ratio.
PEG (NY)2.28
PEG (5Y)4.37
EPS Next 2Y7.32%
EPS Next 3Y5.73%
5. Dividend
5.1 Amount
MDT has a Yearly Dividend Yield of 3.26%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.39, 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 | 3.26% |
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 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
76.97% 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.
DP76.97%
EPS Next 2Y7.32%
EPS Next 3Y5.73%
88.49
+0.43 (+0.49%)
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 Change1.23%
Ins Owners0.24%
Ins Owner Change1.94%
Market Cap113.49B
Analysts72.11
Price Target96.81 (9.4%)
Short Float %1.07%
Short Ratio1.76
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
Yearly Dividend2.77
Dividend Growth(5Y)5.1%
DP76.97%
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)-1.04%
PT rev (3m)-0.38%
EPS NQ rev (1m)-7.18%
EPS NQ rev (3m)-7.11%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.18%
Revenue NQ rev (1m)0.63%
Revenue NQ rev (3m)0.69%
Revenue NY rev (1m)0.88%
Revenue NY rev (3m)0.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.09 | ||
| Fwd PE | 15.03 | ||
| P/S | 3.38 | ||
| P/FCF | 21.89 | ||
| P/OCF | 16.11 | ||
| P/B | 2.36 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.29 |
EPS(TTM)5.5
EY6.22%
EPS(NY)5.89
Fwd EY6.65%
FCF(TTM)4.04
FCFY4.57%
OCF(TTM)5.49
OCFY6.21%
SpS26.15
BVpS37.44
TBVpS-4.19
PEG (NY)2.28
PEG (5Y)4.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.09% | ||
| ROE | 9.71% | ||
| ROCE | 8.43% | ||
| ROIC | 6.74% | ||
| ROICexc | 7.61% | ||
| ROICexgc | 32.33% | ||
| OM | 19.8% | ||
| PM (TTM) | 13.9% | ||
| GM | 65.48% | ||
| FCFM | 15.46% |
ROA(3y)4.43%
ROA(5y)4.54%
ROE(3y)8.11%
ROE(5y)8.19%
ROIC(3y)6.4%
ROIC(5y)6.26%
ROICexc(3y)7.14%
ROICexc(5y)7.08%
ROICexgc(3y)30.08%
ROICexgc(5y)33.46%
ROCE(3y)8%
ROCE(5y)7.83%
ROICexcg growth 3Y-10.99%
ROICexcg growth 5Y-5.11%
ROICexc growth 3Y-1.79%
ROICexc growth 5Y3.7%
OM growth 3Y-2.78%
OM growth 5Y0.8%
PM growth 3Y-4.39%
PM growth 5Y-3.44%
GM growth 3Y-1.44%
GM growth 5Y-0.69%
F-Score6
Asset Turnover0.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 5.5 | ||
| Debt/EBITDA | 2.7 | ||
| Cap/Depr | 64.98% | ||
| Cap/Sales | 5.54% | ||
| Interest Coverage | 8.72 | ||
| Cash Conversion | 74.12% | ||
| Profit Quality | 111.2% | ||
| Current Ratio | 1.85 | ||
| Quick Ratio | 1.42 | ||
| Altman-Z | 2.79 |
F-Score6
WACC6.66%
ROIC/WACC1.01
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 Y7.04%
EPS Next 2Y7.32%
EPS Next 3Y5.73%
EPS Next 5Y6.18%
Revenue 1Y (TTM)3.62%
Revenue growth 3Y1.91%
Revenue growth 5Y3.01%
Sales Q2Q%3.94%
Revenue Next Year5.37%
Revenue Next 2Y5.32%
Revenue Next 3Y5.08%
Revenue Next 5Y5.02%
EBIT growth 1Y8.51%
EBIT growth 3Y-0.93%
EBIT growth 5Y3.84%
EBIT Next Year19.91%
EBIT Next 3Y10.12%
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%