The market had a good week as it rallied hard starting late Tuesday afternoon. It was a nice reprieve but likely only to last until the next negative headline from Europe. Our theme in investing has been and will continue to be to look for stocks with solid dividends, low valuations and good growth prospects. One new selection that meets those criteria is Medtronic.
Medtronic (MDT):
Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. It provides implantable cardioverter-defibrillators, cardiac resynchronization therapy devices, and cardiac pacemakers for the diagnosis, treatment, and management of heart rhythm disorders and heart failure; AF products; diagnostics and monitoring devices; and patient management tools. The company also offers percutaneous coronary and peripheral vascular interventions, and renal denervation for the treatment of coronary artery disease, peripheral vascular disease, and hypertension; endovascular stent grafts to treat abdominal and thoracic aortic aneurysms; and heart valves, arrested and beating heart surgery, and surgical ablation for various heart valve disorders”. (Business Description from Yahoo Finance)
8 reasons Medtronic is a great long term buy at $33:
- Medtronic is selling at the very bottom of its five year valuation range based on P/E, P/S, P/B and P/CF.
- MDT provides a solid 3% yield. More importantly, it has grown its dividend payment by a 20% annual clip over the past five years.
- It is selling at the very bottom of its five-year valuation based on P/S, P/E, P/B and P/CF.
- Medtronic has an AA- rated balance sheet, a low beta (.91) and has increased its earnings by 8% on average over the past half decade despite very challenging economic times.
- 3 Insiders recently bought almost $600K of shares recently. They also have a new CEO and are going through a new product cycle.
- Medtronic consistently produces a return on equity just north of 20%.
- In its last quarter, for the first time in two years the company gained market share in pacemakers and stabilizing its share in ICDs.
- MDT is selling under analysts’ price targets. The mean analyst target on Medtronic is $40 and S&P has a price target of $39 on MDT.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MDT over the next 72 hours.
