Head-To-Head Survey: Medtronic (MDT) and The Competition

Medtronic (NYSE: MDT) is one of 46 publicly-traded companies in the “Electromedical equipment” industry, but how does it compare to its competitors? We will compare Medtronic to related companies based on the strength of its profitability, institutional ownership, risk, analyst recommendations, dividends, valuation and earnings.

Dividends

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Medtronic pays an annual dividend of $1.84 per share and has a dividend yield of 2.3%. Medtronic pays out 40.0% of its earnings in the form of a dividend. As a group, “Electromedical equipment” companies pay a dividend yield of 1.9% and pay out 40.7% of their earnings in the form of a dividend. Medtronic has increased its dividend for 40 consecutive years. Medtronic is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Risk and Volatility

Medtronic has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Medtronic’s competitors have a beta of 1.58, meaning that their average share price is 58% more volatile than the S&P 500.

Earnings and Valuation

This table compares Medtronic and its competitors gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Medtronic $29.71 billion $4.03 billion 17.32
Medtronic Competitors $1.10 billion $121.87 million -38.41

Medtronic has higher revenue and earnings than its competitors. Medtronic is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Insider and Institutional Ownership

81.2% of Medtronic shares are owned by institutional investors. Comparatively, 40.7% of shares of all “Electromedical equipment” companies are owned by institutional investors. 0.3% of Medtronic shares are owned by insiders. Comparatively, 20.1% of shares of all “Electromedical equipment” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Medtronic and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medtronic 9.44% 12.65% 6.58%
Medtronic Competitors -136.44% 33.70% -12.43%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Medtronic and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medtronic 0 6 16 0 2.73
Medtronic Competitors 145 439 968 26 2.55

Medtronic currently has a consensus target price of $91.24, indicating a potential upside of 14.53%. As a group, “Electromedical equipment” companies have a potential upside of 19.76%. Given Medtronic’s competitors higher probable upside, analysts clearly believe Medtronic has less favorable growth aspects than its competitors.

Summary

Medtronic beats its competitors on 10 of the 15 factors compared.

About Medtronic

Medtronic Public Limited Company (Medtronic) is a medical technology and services company. The Company develops, manufactures and markets its medical devices and technologies to hospitals, physicians, clinicians and patients in approximately 160 countries. The Company operates in four segments: Cardiac and Vascular Group, Minimally Invasive Technologies Group, Restorative Therapies Group and Diabetes Group. The Cardiac and Vascular Group segment includes Cardiac Rhythm & Heart Failure, Coronary & Structural Heart and Aortic & Peripheral Vascula. Its Minimally Invasive Technologies Group segment includes Surgical Solutions and Patient Monitoring and Recovery. Its Restorative Therapies Group segment includes Spine, Neuromodulation, Surgical Technologies and Neurovascular. Its Diabetes Group segment includes Intensive Insulin Management, Non-Intensive Diabetes Therapies and Diabetes Services & Solutions. The Company’s subsidiaries include Medtronic, Inc. and HeartWare International, Inc.

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