Medtronic (MDT) is one of the largest medical device companies on the planet. Its devices are found in 150 countries, asserts Steve Mauzy, editor of Wyatt Research's Personal Wealth Advisor.
Its medical devices include implantable cardiac pacemakers, defibrillators, monitors, aortic valves, stents, and angioplasty balloons.
Beyond cardio, we’re about talking respiratory ventilators, dialysis machines, catheters, suturing equipment, devices used for spine and musculoskeletal systems, orthopedic and dental equipment, diabetic pumps and syringes, and much more.
Medtronic has maintained a growth trajectory through most of its 71-year history. Growth has arisen organically and through strategic acquisitions.
The largest acquisition occurred five years ago when Medtronic acquired Covidien, a medical-device competitor, for $49.9 billion.
The acquisition raised Medtronic’s profile around the world. It also raised operating and net margins thanks to a realized $850 million in annual cost savings.
I’ll concede the fallout from the pandemic will crimp growth in fiscal-year 2021 (which ends in nine months). That said, elective medical procedures can’t be postponed indefinitely. After all, the elective progresses to the urgent when neglected. The urgent, if neglected, progresses to the emergent.)
I expect pre-pandemic growth levels to return by the fourth quarter (next April) of fiscal-year 2021. Growth will be fueled by pent-up demand being released from its lockdown.
An extending pipeline provides additional fuel. Key product launches include the next-generation TAVR valve, the Micra AV transcatheter pacing system, and the soft-tissue robotics platform.
Medtronic has maintained a growth trajectory for most of its 71 years. Its dividend has maintained a similar trajectory. The dividend has been raised every year for the past 43 years. It was raised again this past May.
Medtronic will remain mired in the coronavirus miasma for most of calendar year 2020. I expect the company to escape the miasma in early 2020.
Growth should return with a vengeance once the new fiscal year arrives. Demography points to continued growth for years, if not decades, to come.
