MEDTRONIC PLC (MDT) Stock Fundamental Analysis
NYSE:MDT - New York Stock Exchange, Inc. - IE00BTN1Y115 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to MDT. MDT was compared to 189 industry peers in the Health Care Equipment & Supplies industry. While MDT has a great profitability rating, there are some minor concerns on its financial health. MDT has a valuation in line with the averages, but on the other hand it scores bad on growth. Finally MDT also has an excellent dividend rating. These ratings could make MDT a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
MDT had positive earnings in the past year.
In the past year MDT had a positive cash flow from operations.
MDT had positive earnings in 4 of the past 5 years.
Of the past 5 years MDT 4 years had a positive operating cash flow.
1.2 Ratios
MDT's Return On Assets of 4.73% is amongst the best of the industry. MDT outperforms 83.07% of its industry peers.
With an excellent Return On Equity value of 8.63%, MDT belongs to the best of the industry, outperforming 84.66% of the companies in the same industry.
MDT has a Return On Invested Capital of 6.09%. This is amongst the best in the industry. MDT outperforms 80.42% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MDT is in line with the industry average of 7.87%.
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.
With an excellent Operating Margin value of 19.47%, MDT belongs to the best of the industry, outperforming 92.59% of the companies in the same industry.
MDT's Operating Margin has declined in the last couple of years.
The Gross Margin of MDT (65.59%) is better than 67.72% 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 | 19.47% | ||
| 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
MDT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
There is no outstanding debt for MDT. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
An Altman-Z score of 2.77 indicates that MDT is not a great score, but indicates only limited risk for bankruptcy at the moment.
MDT has a Altman-Z score of 2.77. This is in the better half of the industry: MDT outperforms 70.37% 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's Debt to FCF ratio of 4.87 is amongst the best of the industry. MDT outperforms 81.48% 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 42.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 4.87 | ||
| Altman-Z | 2.77 |
ROIC/WACC0.91
WACC6.68%
2.3 Liquidity
MDT has a Current Ratio of 1.90. 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 Current ratio of 1.90. This is in the lower half of the industry: MDT underperforms 68.25% of its industry peers.
MDT has a Quick Ratio of 1.43. This is a normal value and indicates that MDT is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of MDT (1.43) is worse than 64.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.9 | ||
| Quick Ratio | 1.43 |
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.
EPS 1Y (TTM)5.57%
EPS 3Y-0.72%
EPS 5Y3.68%
EPS Q2Q%10.96%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
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 7.67% yearly.
Based on estimates for the next years, MDT will show a small growth in Revenue. The Revenue will grow by 5.03% on average per year.
EPS Next Y7.04%
EPS Next 2Y7.32%
EPS Next 3Y7.31%
EPS Next 5Y7.67%
Revenue Next Year4.48%
Revenue Next 2Y4.78%
Revenue Next 3Y4.85%
Revenue Next 5Y5.03%
3.3 Evolution
The EPS 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
With a Price/Earnings ratio of 14.71, MDT is valued correctly.
MDT's Price/Earnings ratio is rather cheap when compared to the industry. MDT is cheaper than 86.24% of the companies in the same industry.
MDT's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.91.
MDT is valuated correctly with a Price/Forward Earnings ratio of 13.74.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MDT indicates a rather cheap valuation: MDT is cheaper than 84.66% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.85, MDT is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.71 | ||
| Fwd PE | 13.74 |
4.2 Price Multiples
83.60% of the companies in the same industry are more expensive than MDT, based on the Enterprise Value to EBITDA ratio.
87.30% 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 | 18.98 | ||
| EV/EBITDA | 12.67 |
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 a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.09
PEG (5Y)3.99
EPS Next 2Y7.32%
EPS Next 3Y7.31%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.36%, MDT has a reasonable but not impressive dividend return.
MDT's Dividend Yield is rather good when compared to the industry average which is at 1.82. MDT pays more dividend than 98.41% of the companies in the same industry.
MDT's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.36% |
5.2 History
The dividend of MDT is nicely growing with an annual growth rate of 6.78%!
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)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.
The dividend of MDT is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP84.62%
EPS Next 2Y7.32%
EPS Next 3Y7.31%
80.91
-3.5 (-4.15%)
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 Change1.9%
Market Cap103.77B
Analysts71.58
Price Target97.98 (21.1%)
Short Float %0.96%
Short Ratio1.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.36% |
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)-0.11%
PT rev (3m)1.58%
EPS NQ rev (1m)0.05%
EPS NQ rev (3m)-1.7%
EPS NY rev (1m)0.04%
EPS NY rev (3m)0.09%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-0.4%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.71 | ||
| Fwd PE | 13.74 | ||
| P/S | 3.13 | ||
| P/FCF | 18.98 | ||
| P/OCF | 14.23 | ||
| P/B | 2.1 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.67 |
EPS(TTM)5.5
EY6.8%
EPS(NY)5.89
Fwd EY7.28%
FCF(TTM)4.26
FCFY5.27%
OCF(TTM)5.69
OCFY7.03%
SpS25.89
BVpS38.51
TBVpS-2.82
PEG (NY)2.09
PEG (5Y)3.99
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 | 2.77 |
F-Score6
WACC6.68%
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)5.57%
EPS 3Y-0.72%
EPS 5Y3.68%
EPS Q2Q%10.96%
EPS Next Y7.04%
EPS Next 2Y7.32%
EPS Next 3Y7.31%
EPS Next 5Y7.67%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%3.94%
Revenue Next Year4.48%
Revenue Next 2Y4.78%
Revenue Next 3Y4.85%
Revenue Next 5Y5.03%
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%